v o-3«*V V-« : >* V*?^Y V-- : >* V*2*> V--. 

ft" *^ •«&'- ^ 0< :*«»■ *^ •«»• *■* :«■& ^* - N ^fe*- ^ 
v «o V*^?-\^* ^*^*£\ o V*"%-\<?> <*„ ^?V a o V-S^-tr. 




JD* .l^L'. > 



L ^^ - 'SK** ** v %> °-xPP?** <,^\. vSBv" ** v % »;OT^ «/%. '•-' 







»j<5SVfc*_ o 










$'o* S^^S?" J>** \**^|^\c/ %/?Pf^V* %/*^i$\o** %/*^l?'V* 



5> ._L^L'» *> 













>. * • • • ° v& 



c°*..^Ki*>o ^\v^k-V . c°*..^ji:->o y\^*A ^/^k-'° 



















O > 






^tf 1 



ST •*■ ^v . ■ 



v 



'■W$. : /% : -SK ; ** v ^ '°™ ; /x -SR-' ** v ^- ••™ ; f /x -I 














•X ^ ^-.\ /\^&'X /*sjgm?\ y<-im&\ 

•• j> %*??!&#> v^^ # y %/^>'V V^\^ %^-*V 






•w 







V V 







v* v 



" ^ < ! 









fl5°««v 



\/ 




t o. 






4- v ^* 















IC 


8900 



Bureau of Mines Information Circular/1982 




Future Trends and Prospects 
for the Australian Mineral 
Processing Sector 

By L. Nahai and Charlie Wyche 




UNITED STATES DEPARTMENT OF THE INTERIOR 



jDONESIA 

INDIAN 
OCEAN 




WESTERN 
AUSTRALIA 



Perth 



SO 

Darwin 



GULF 
O OF 
CARPENTARIA] 



NORTHERN 



TERRITORY 



CORAL 
SEA 



QUEENSLAND 



SOUTH 



AUSTRALIA 



6 
\ 



Brisbane • 



» Adelaide^ 



NEW 
SOUTH 
WALES 

Sydney t 
Canberra Q 



[VICTORIA 

1 Melbourne^ 



INDIAN 



TASMANIAV J 

(Hoban/ 

XJJ 



OCEAN 



FIGURE 1. - Administrative boundaries of Australia. 



Information Circular 8900 

II 

Future Trends and Prospects 
for the Australian Mineral 
Processing Sector 

By L. Nahai and Charlie Wyche 




UNITED STATES DEPARTMENT OF THE INTERIOR 
James G. Watt, Secretary 

BUREAU OF MINES 
Robert C. Horton, Director 



This publication has been cataloged as follows: 




0$ 



\>V 



1\ 



4, 



Nahai, Lotfollah 

Future trends and prospects for the Australian mineral processing 
sector. 

(Information circular/ United States Department of the Interior, Bu- 
reau of Mines ; 8900) 

Includes bibliographical references. 
Supt. of Docs, no.: I 28.27:8900. 

1. Mineral industries— Australia. 2. Mineral industries— Government 
policy— Australia. 3. Competition, International. I. Wyche, Charlie. 
II. Title. III. Series: Information circular (United States. Bureau of 
Mines) ; 8900. 

-T#295.U4 1TTDSfffif37*^622s [338.2'0994] 82-600278 



CONTENTS 



Page 



Abstract 1 

Introduction 2 

Acknowledgments 3 

Status of the Australian mineral industry 3 

Prospects for shifts toward further processing 5 

Overview 5 

Political, economic, and social factors 7 

Political factors 7 

Economic factors 8 

Labor 8 

Capital 10 

Foreign equity 12 

Energy 13 

Infrastructure 16 

Transportation 16 

Tariffs 19 

Environmental and social factors 21 

Implications of increased Australian mineral processing for the United States.. 21 

Commodity reviews 22 

Bauxite, alumina, and aluminum 22 

Commodity profile 22 

Analysis of pertinent factors 24 

Bauxite-alumina 24 

Alumina-aluminum 24 

Copper 25 

Commodity profile 25 

Analysis of pertinent factors 28 

Iron ore 28 

Commodity profile 28 

Analysis of pertinent factors 30 

Lead, zinc, and silver 31 

Commodity profile 31 

Analysis of pertinent factors 33 

Manganese 34 

Commodity profile 34 

Analysis of pertinent factors 35 

Nickel 35 

Commodity profile 35 

Analysis of pertinent factors 37 

Tin 37 

Commodity profile 37 

Analysis of pertinent factors 38 

Titanium minerals 38 

Commodity profile 38 

Analysis of pertinent factors 39 

Tungsten 39 

Commodity profile 39 

Analysis of pertinent factors 40 

^ Summary 40 



ii 

ILLUSTRATIONS 

Page 

1. Administrative boundaries of Australia Inside front cover 

2. Major metalliferous mines and smelters of Australia Inside back cover 

TABLES 

1 . Australia: Production of selected mineral commodities 4 

2 . Exports of ores and concentrates from Australia 11 

3. Estimated investment costs for expansion of production of selected nonfer- 

rous metals 11 

4. Mineral and metal transportation in Australia 17 

5. Tariff levels of European Community, Japan, and tbe United States for 

selected commodities 20 

6 . Principal Australian aluminum companies 23 

7. Australian copper production by company, 1980 26 

8. Leading copper-producing mines in Australia, 1980. 27 

9. Leading iron-ore-producing mines in Australia, 1980 29 

10. Lead-zinc mines in Australia 32 

11. Leading nickel-producing mines in Australia 36 



FUTURE TRENDS AND PROSPECTS FOR THE AUSTRALIAN 
MINERAL PROCESSING SECTOR 

By L. Nahai ' and Charlie Wyche ' 



ABSTRACT 

An important objective of the Australian Government's policies on re- 
sources development is to encourage further processing of raw materi- 
als domestically, to the extent that this is economically feasible and 
consistent with sound industrial development. This Bureau of Mines 
report examines the extent to which Australia is able to pursue this 
policy in terms of its own competitive advantages and the implications 
of such a policy for the United States. Such factors as the impact of 
other competing producers and their advantages, expected world demand, 
and infrastructural problem — which may limit pursuit of this policy to 
the fullest extent — are discussed. After a broad review of the re- 
source, economic, social, and environmental factors, the perspective for 
increased processing is examined for a number of mineral commodities. 





'Physical scientist, Division of Foreign Data, Bureau of Mines, Washington, D.C 



INTRODUCTION 



Australia has had an impressive growth 
in mineral production since the early 
1950' s and, based on value, is the fifth 
largest nonfuel-mineral-producing coun- 
try. In view of the limited domestic 
demand and processing facilities, a sub- 
stantial share of Australian mineral out- 
put is exported as metal as well as con- 
centrates (bismuth, copper, lead, zinc, 
tin, and nickel) or as concentrates 
(ilmenite, rutile, zircon, and tungsten 
ore). Although some steel and aluminum 
are exported, the largest shares of iron 
ore and bauxite output are exported as 
iron ore and as bauxite and alumina. In 
terms of metal content, percentage of 
mine production processed to metal is 
estimated as about 90 for lead, 70 for 
copper, 65 for zinc, and 44 for tin. For 
iron and manganese ore the figures are 
13% and 19%, respectively. Practically 
all tungsten and titanium ores are ex- 
ported as concentrates. The importance 
of the export trade is illustrated by ex- 
ports as percentages of production. In 
1979, the percentages were 88 for lead, 
8.5 for iron ore, 87 for alumina, 42 for 
zinc, and 64 for copper. Except for mod- 
est tonnages of ilmenite, used for domes- 
tic production of titanium paint, all 
titanium- and zircon-bearing mineral 
sands are exported as concentrate. The 
percentage for manganese, although not 
reported, must also be in the neighbor- 
hood of 75% to 80%. 

Many countries have established good 
mineral trading relations with Australia. 
Australia is an important supplier of 
coal, iron ore, bauxite, copper, manga- 
nese ore, zircon, and zinc concentrate to 
Japan. Australia is particularly impor- 
tant to the United States as a source of 
bauxite, alumina, and rutile. Western 
Europe is the market for some of Austra- 
lia's production of iron ore, coal, lead 
and zinc concentrates, and rutile. 



feasible and consistent with sound indus- 
trial development. However, the policy 
statement stipulated that the Government 
seeks to do this without restraining the 
potential for exports of unprocessed raw 
materials^ and while recognizing the 
development of raw materials processing 
is a matter for private enterprise. Most 
base and precious metal ores produced in 
Australia are smelted in the country, but 
Australia also exports some of its mine 
production of these metals (copper, lead, 
and zinc among others) as concentrates. 
In addition substantial shares of the 
total output of bauxite and of iron, man- 
ganese, titanium, tungsten, and zirconium 
ores are also exported as ores with only 
benef iciation. The policy of encouraging 
domestic processing is designed to change 
the balance toward more metal production 
and export; anticipated benefits include 
added value and employment opportunity. 

The figures on the percentages of mine 
production processed to metal indicate 
that there are substantial opportunities 
for Australia to expand production and 
export of aluminum, copper, zinc, tin, 
tungsten, and iron and steel at the ex- 
pense of that share of production which 
is currently exported as beneficiated ore 
and concentrates. This Bureau of Mines 
study examines the factors that favor or 
impede the attainment of the objective of 
increased domestic processing of Austra- 
lian mineral raw materials, which, in 
line with the policy, should be economi- 
cally feasible. These factors are not 
only resource related but also include 
economic, social, and environmental fac- 
tors; the expected supply and demand in 
the next decade or so; and the position 
of Australia's competitors (developed and 
developing) in the world market. Impli- 
cations of the policy for the United 
States are reviewed. 



Since about 1978 an important objective 
of the mineral policy of the Australian 
Government has been to encourage further 
processing of minerals domestically to 
the extent that this is economically 



2 Australian Department of Trade and Re- 
sources. Australia's Mineral Resources, 
Development and Policies. Australian 
Government Publishing Service, Canberra, 
1981, 18 pp. 



Figure 1, on the inside front cover, 
shows the administrative boundaries of 
Australia. The major metal mines and 



smelters appear in figure 2, on the in- 
side back cover. 



ACKNOWLEDGMENTS 



The authors would like to express their 
appreciation to L. Baumgardner, H. Kurtz, 
W. Butterman, F. Klinger, J. Rathjen, 
V. A. Cammarota, G. DeHuff, S. Sibley, 
J. Carlin, L. Lynd, and P. Stafford, 
commodity specialists of the Bureau of 
Mines, who reviewed respectively the com- 
modity reviews on bauxite and alumina, 



aluminum, copper, iron ore, lead, zinc, 
manganese, nickel, tin titanium, and 
tungsten. The review of the whole re- 
port by V. A. Cammarota, Donald Colby, 
John Corrick, Hermann Enzer, Ebraham 
Shekarchi, John Stamper, and Phillip 
Yasnowsky, and their helpful suggestions, 
are also acknowledged. 



STATUS OF THE AUSTRALIAN MINERAL INDUSTRY 



The mineral industry, including value 
added by domestic smelting and process- 
ing, accounts for about 10% of the gross 
national product of Australia. Mineral 
and metal exports also account for about 
38% to 40% of all exports. Coal ranks 
first in value of mineral exports, ac- 
counting for 29%, followed by iron ore 
(18%) and alumina (14%). Table 1 gives 
production of selected mineral commod- 
ities for 1979-81. 

Domestic capital is dominant in nonfer- 
rous and precious metals production and 
in titanium mineral operations, but for- 
eign capital has been a big factor in the 
expansion and production of coal, iron 
ore, and bauxite -alumina and in the ex- 
pected production of diamond. Australia 
is a major world producer of coal, iron 
ore, bauxite, titanium minerals (ilmenite 
and rutile), and ores of manganese, lead, 
zinc, tin, and tungsten. (Coal, petro- 
leum, and uranium are included in this 
overview for completeness only and are 
not examined individually in the commod- 
ity reviews section. ) For many of these 
commodities, Australia is one of the top 
five world producers. In addition, Aus- 
tralia has emerged as an important 
producer of nickel and is expected to 
become the same for diamond. In mine 
output of ores and concentrates, Austra- 
lia ranks first in world production of 
bauxite, bismuth, ilmenite, rutile, and 
zircon, second in iron ore, third in 
tungsten ore, fourth in nickel, and fifth 
in manganese and tin ores. In 1980 its 



share of world production of these com- 
modities, as well as of bituminous coal 
and lignite, were as follows, in percent: 
bauxite 31, bismuth 27, coal 4, ilmen- 
ite 27, iron ore 11, lignite 3, manga- 
nese 7, nickel 8, rutile 69, tin 5, tung- 
sten 6, zircon 79. 

Because of its large bituminous coal 
and lignite production, currently 
112 million and 33 million tons per year 
respectively, Australia is a net energy 
exporter, but domestic petroleum produc- 
tion (about 144 million barrels in 1981) 
is sufficient for only about two-thirds 
of domestic consumption. 

Australian smelting capacity, except 
for steel, substantially exceeds domestic 
consumption. The 1981 capacities in 
thousand tons follow: crude steel 9,100, 
aluminum 367, copper 200, lead 400, nick- 
el 35, and zinc 300. Coal is produced 
substantially in New South Wales and 
Queensland, and iron ore in Western Aus- 
tralia. Queensland and New South Wales 
lead in production of copper, lead, sil- 
ver, and zinc. Besides being the princi- 
pal iron-ore-producing State, Western 
Australia has much of the gold and nickel 
ores and diamonds. At present the Mary 
Kathleen Mine in Queensland and the 
Nabarlek and Ranger Mines in the Northern 
Territory are the only uranium-producing 
mines , but future developments in the 
Northern Territory are expected to make 
Australia a major world producer. 



TABLE 1. - Australia: Production of selected mineral commodities 
(Thousand metric tons unless otherwise specified) 



Commodities 



1979 



1980 



1981 (est.) 



METALS 

Aluminum: 

Bauxite , gross weight , 

Alumina , 

Metal, refined , 

Copper: 

Mine output, metal content 

Blister , primary , 

Refined, primary , 

Gold: 

Mine output , metal content thousand ounces 

Metal, refined do , 

Iron and steel: 

Iron ore , gross weight , 

Metal: 

Pig iron , 

Crude steel 

Lead: 

Mine output , metal content , 

Refined , primary , 

Manganese ore , gross weight , 

Nickel: 

Mine output , metal content 

Metal, refined , 

Metal in oxide 

Silver: 

Mine output, metal content. .. .thousand troy ounces 
Metal, refined. do , 

Tin: 

Mine output , metal content , 

Refined, primary 

Titanium minerals, concentrates, gross weight: 

Ilmenite (including leucoxene) , 

Rutile 4 

Tungsten, concentrates (calculated to 65% WO3) , 

Zinc: 

Mine output , metal content , 

Refined, primary. , 

Zircon, concentrates, gross weight , 



MINERAL FUELS 

Coal , bituminous and subbituminous 

Coal, lignite 

Petroleum thousand 42-gallon barrels . . 

Natural gas million cubic feet . . 



27,583 

7,415 

270 

238 
163 
138 

597 
534 

91,717 

7,811 
8,125 

422 

216 

1,724 

70 
22 
17 

26,756 
9,469 

13 
5 

1,203 

275 

6 

529 

305 
445 



83,160 

32,597 

159,560 

295,971 



27,179 

7,246 

303 

232 
175 
145 

548 
475 

95,534 

6,960 
7,594 

397 

200 

2,020 

74 
17 
18 

25,375 
9,761 

12 
5 

1,409 

312 

7 

495 
301 
492 



84,252 

32,895 

139,885 

337,874 



26,500 

7,079 

379 

223 
160 
164 

522 
482 

88,000 

6,860 
7,635 

392 

208 

1,397 

74 
23 
19 

23,247 
10,776 

12 

4 

1,390 

236 

6 

508 
296 
425 



111,700 

32,963 

143,674 

397,938 



The Australian mineral industry is rel- 
atively well served by infrastructure and 
ports. Port Kembla, Sydney, and New- 
castle serve coal exporters in New South 
Wales, and Hay Point, Gladstone, and 
Bowen handle coal exports in Queensland. 
In Western Australia, iron ores are 
shipped from Dampier, Cape Lambert, and 
Port Hedland, and bauxite-alumina from 
Fremantle. The port at Gladstone is used 
for alumina shipments in Queensland. 

Australia enjoys a geographical advan- 
tage in the Pacific Basin as a mineral 
exporter. Japan, as the world's third 
largest economy, and Korea and Taiwan, as 
emerging industrialized countries, pro- 
vide ready markets for Australian raw 
materials. 

In the foreseeable future, the Austra- 
lian minerals industry will remain export 
oriented because domestic consumption is 
not expected to increase sufficiently to 
absorb all the minerals produced. Aus- 
tralia is a highly developed country with 
a population of about 14.6 million and a 



1979 per capita income of $8,360. Aver- 
age annual growth in population is 1.2%, 
and immigration is strictly controlled. 
Therefore, a dramatic increase in popula- 
tion is not foreseen. Assuming a sus- 
tained economic buoyancy, the Government 
has predicted that real gross domestic 
product (GDP) growth could average 5% 
per annum over the next decade. Although 
this is a respectable rate of growth, 
considering that the per capita income Is 
already high, such a GDP growth would not 
be enough to absorb domestically all the 
minerals produced. 

Australia also imports minerals and 
mineral products. The most important 
import is crude oil, which accounted for 
80% of the total value of 1981 imports 
valued at $1 billion. Modest tonnages of 
steel semi-manufactures are also imported 
because the industry does not produce all 
the required shapes and sufficient quan- 
tities of various grades. Phosphate, 
sulfur, and manufactured fertilizers, 
asbestos, and diamonds are the principal 
nonmetallic imports. 



PROSPECTS FOR SHIFTS TOWARD FURTHER PROCESSING 



OVERVIEW 

The Australian Government has placed a 
high priority on processing minerals from 
Australian raw materials for export; 
where such a course is economically fea- 
sible and in keeping with sound indus- 
trial development. A 1980 report on 
mineral processing prepared by the Aus- 
tralian Trade Development Council 3 states 
that the potential exists "...for the 
longer term development of additional 
world-scale smelting or refining 
capacity" of primary copper, zinc, ferro- 
manganese, and ferrosilicon production. 
Some potential also exists for moderate 
expansion of lead production capacity. 
Downstream processing of tungsten to 
ammonium paratungstate is mentioned as 
a possibility. This report does not 

^Australian Trade Development Council. 
Mineral Processing, A Comparative Study. 
Canberra, 1980, 209 pp. 



discuss the processing of bauxite, 
presumably because it has been the sub- 
ject of other studies. 

The Government has reviewed the taxa- 
tion system to see if more effective 
assistance could be offered for the 
establishment of new processing opera- 
tions in Australia. A Commonwealth/ State 
Standing Joint Study Group was estab- 
lished in 1979 to provide information to 
the Australian Minerals and Energy 
Council. 

Australia enjoys a number of compet- 
itive advantages (e.g., abundant re- 
sources, favorable energy situation, 
numerous ports , and proximity to the con- 
suming countries of Southeast Asia and 
Japan) for processing some of the min- 
erals produced in the country. As noted 
in the following paragraphs, these pros- 
pects differ from commodity to 
commodity. 



Bauxite and aluminum. — Australia 



is 



uniquely well posed for growth in alumi- 
num production. Current plans for alu- 
minum, if implemented, would add 
600,000 tons to the current capacity of 
400,000 tons of aluminum. The amount of 
bauxite processed domestically for alumi- 
num is 4.5%, based on 4 tons of bauxite 
being needed to produce 1 ton of metal. 
Processing of bauxite to alumina has some 
inherent shipping advantages because of 
weight ratio of the ore to alumina. For 
bauxite-aluminum the ratio is 4 to 1, 
compared with about 1.75 to 1 for lead 
and zinc concentrates to their respective 
metals and less than 3 to 1 for copper 
(assuming 30% copper concentrate and 60% 
lead and zinc concentrates). Of course, 
the shipping cost advantages for metals 
resulting from the above ratios are to 
some extent reduced by shipping cost 
advantages for bulk materials (bauxite 
and concentrates) versus metals, which 
would be subject to higher freight. 

Australia's competitive advantage lies 
in the fact that it has a number of baux- 
ite deposits, each with reserves of such 
magnitude that, ignoring other considera- 
tions such as infrastructure, water sup- 
ply, etc., it can support investment for 
an alumina/ aluminum complex. Also the 
Weipa deposit in Queensland, the Jar- 
rahdale deposit in Western Australia, and 
Gove in the Northern Territory are well 
located for sea transportation. These 
deposits, except for Gove with 250 mil- 
lion tons of bauxite reserves, have 
reserves ranging from 1 billion (Jarrah-' 
dale) to 3.5 billion tons (Weipa). On 
the other hand, posed as it is for expan- 
sion in aluminum production and enjoying 
competitive advantages, Australia has 
environmental and other restraints that 
may preclude the full exploitation of the 
resource advantages. 

Iron ore. — As with bauxite, the over- 
whelming tonnage of iron ore output is 
exported. In terms of metal content only 
about 12% of iron ore production is 
smelted domestically (assuming 1.5 tons 
of ore per ton of pig iron). In terms 
of resources of iron ore and energy 
(principally coking coal) Australia has 



also the same advantages as for bauxite. 
However, a number of factors would cau- 
tion against substantial expansion in the 
Australian iron and steel industry except 
to meet increased domestic demands. 
These factors include (1) the expected 
low increase in the rate of world demand 
for steel, (2) increased production in 
emerging industrialized countries such as 
the Republic of Korea, China, and Brazil 
with low labor costs, (3) modest produc- 
tion in a number of countries such as 
Saudi Arabia and Qatar with low energy 
costs, and (4) existing excess capacity 
in countries responsible for the bulk 
of current world production, i.e., 
the United States, Europe (East and 
West), and Japan. In fact, the Broken 
Hill Proprietary Co. Ltd., the only steel 
producer in Australia, has been investing 
in improvements and modernization at 
existing facilities rather than in new 
capacity. 

Copper. — As for copper, lead, and zinc, 
an increase in smelter capacity would be 
modest because much of the ore production 
is already smelted domestically. Proven 
and indicated reserves at the mines that 
export copper concentrate (Rosebery and 
Mount Lyell Mines in Tasmania, and the 
Mount Gunson Mine in South Australia) are 
not large enough to sustain an integrated 
processing operation. The rather low- 
grade ore of the Tasmanian deposits also 
makes their production subject to the 
vagaries of the copper price. Therefore, 
it would seem that substantial additional 
reserves need to be developed before 
establishing additional smelting and re- 
fining capacity. The Roxby Downs copper 
deposit in South Australia has the poten- 
tial for supplying sufficient ore to sup- 
port an integrated smelting refining 
complex. 

Lead and zinc. — The picture is similar 
for lead and zinc for which the largest 
producers — Mount Isa Mines Ltd. and New 
Broken Hill Consolidated Ltd. — smelt the 
ore in Australia at Mount Isa and Port 
Pirie. The Port Pirie smelter also 
includes refining; it is, in fact, the 
world's largest lead smelter-refinery 
complex. The remainder of the lead-zinc 



ore production, not smelted locally, 
originates from a number of deposits oc- 
curring over a wide geographical area. 
Individually, these deposits are not 
large enough to justify their own smelt- 
ers. Operators may find it more economic 
to export concentrates, at least in the 
short run. 

Tin . — About half of Australia's tin 
production is smelted locally. Renison 
Ltd. in Tasmania, which accounts for 
nearly half of Australia's tin mine pro- 
duction, is in a good position for estab- 
lishing a smelter. The company ships its 
concentrate for smelting to Malaysia and 
to the Sydney smelter of the Associated 
Tin Smelters Pty., Ltd. The Sydney 
smelter receives concentrates also from 
the Mount Cleveland deposit of Cleveland 
Tin Ltd. and several small operations in 
the Emmaville district. Because of the 
changing demand pattern, tin has a very 
low anticipated rate of growth in demand 
in the major consuming countries. In 
fact, under certain assumptions, 4 current 
world tin-refining capacity may be ade- 
quate for anticipated demand in 2000. 
The development of the Rondonia deposits 
in Brazil could influence decisions in 
Australia to construct smelters. 

Nickel. — The Australian nickel industry 
is expected to follow the world trend 
whereby most nickel processing is carried 
out close to the source of supply. Vir- 
tually all of the current nickel ore 
produced in Australia is processed 
locally into matte, oxide, or metal. The 
Western Mining Corp. (WMC), with the 
installation of a new flash furnace at 
the Kalgoorlie smelter, has an annual 
capacity of 55,000 tons of nickel in 
nickel matte. Use of existing oxy- 
gen plant with some additional equip- 
ment could easily increase production 
capacity to about 85,000 tons of nickel 
in nickel matte. The capacity is con- 
sidered adequate to process the expected 
production from both WMC's own and 
other mines. Based on Australia's 

4 Carlin, J. F., Jr. Tin. Ch. in Min- 
eral Facts and Problems 1980 Edition. 
BuMines Bull. 671, 1981, p. 957. 



extensive nickel reserves , the Bureau of 
Mineral Resources forecasts nickel 
production to reach 100,000 tons in 
1982 and 155,000 tons by 2000. It is 
expected that the additional production 
would be processed domestically. The 
main constraint on the anticipated pro- 
duction expansion is the rate of 
expansion in world demand. 

POLITICAL, ECONOMIC, AND SOCIAL FACTORS 

Political Factors 

Endowed with rich mineral resources and 
having attained the position of a leading 
world producer for a number of commod- 
ities, Australia pursues a policy of 
(1) maximizing income from exploitation 
of its mineral resources, (2) limiting 
foreign ownership and control, (3) exer- 
cising controls on mining and marketing 
of mineral deposits so as to meet Govern- 
ment policy objectives, and (4) limiting 
the adverse environmental consequences of 
mining. In Australia, power is shared by 
the Federal and State Governments. The 
ownership of mineral rights is held by 
the Federal Government, and the right to 
exploit is vested in the various States. 
The Federal Government plays a crucial 
role, because it sets income tax rates, 
regulates foreign investment and minimum 
Australian participation in mineral 
projects, and establishes international 
trade policy. The Federal Government is 
also responsible for matters affecting 
the aborigines of the Northern Territory. 
The Environmental Protection Act of 1974 
gives significant authority to the 
Federal Government (e.g., reviewing to- 
gether with the State governments the 
environmental impact studies that must be 
undertaken prior to the approval or com- 
mencement of a mineral project). The 
States have primary responsibility for 
protecting the environment, however. 

Granting exploration rights and mining 
leases, mining operations, levying royal- 
ties and similar charges, and providing 
infrastructure, including utilities, come 
within the powers of the State 
governments . 



The extent to which the Federal Govern- 
ment has direct involvement in the explo- 
ration and/or development of mineral 
resources has been dependent on the gen- 
eral economic policy of the government in 
power. Whereas the present government 
encourages both national and interna- 
tional private enterprise and relies on 
the market forces, the previous Labor 
government had a policy of promoting do- 
mestic ownership and control of mineral 
policy. This policy resulted in the 
Petroleum and Minerals Authority Act of 
1973. Despite the present government's 
philosophy of avoiding direct involvement 
in mineral development and pro-business 
attitude on economic management, most of 
the policy measures implemented and new 
regulatory institutions created as a re- 
sult of the 1973 act have been retained. 
Also, the degree of foreign ownership and 
control of Australia's mineral resources 
remains a matter of continuing concern 
and becomes, at times, an emotional 
issue. 

Both the Federal and State governments 
have control over mineral development. 
No company, Australian or otherwise, can 
explore for, mine, or market minerals 
without first receiving permission from 
the appropriate Federal or State agency. 
When a company mines a mineral deposit, 
it does so under terms and conditions set 
by the appropriate agency. A company 
does not own the resources, but is merely 
given the right to develop them. The 
Australian Government furthermore can 
control minerals development by revoking 
export licenses and regulating the bor- 
rowing of foreign funds. 

Generally speaking, the States encour- 
age the rapid development of their 
mineral resources because it brings 
them direct benefits, e.g., royalties, 
infrastructure development, and employ- 
ment opportunities. Since the States are 
generally eager to attract foreign capi- 
tal, they (particularly Western Austra- 
lia, Queensland, and New South Wales) are 
also interested in relaxing present 
guidelines. These divergent policies 
cause a certain dichotomy for investors, 



especially when the Federal and the State 
governments are politically opposed. 

Economic Factors 

The execution of a policy of maximum 
processing of Australia's raw materials 
must take into account a number of eco- 
nomic and special factors. Although min- 
eral processing is not labor intensive, a 
pool of skilled labor must be available 
to operate the new smelters and refin- 
eries. Another aspect of labor that 
would influence investment decisions and 
cost effectiveness of the operation is 
industrial labor relations. Mineral 
processing is capital intensive. Capital 
availability — domestic and/or foreign — 
and capital costs of establishing proc- 
essing facilities in Australia compared 
with capital costs of similar facilities 
in potentially competitive countries must 
be taken into account. Attitude toward 
foreign capital and concern or even hos- 
tility toward the development of the 
country's natural resources by foreign 
capital will influence capital availabil- 
ity. Environmental restraints — location 
of processors and smelters , and air and 
water pollution resulting from the opera- 
tion of such facilities — would inhibit 
execution of the processing policy. Land 
use restrictions because of aborigines' 
rights would also be a deterring factor. 

Labor 

Australia has a long history of mining. 
Coal mining started not many decades 
after the arrival of the first settlers 
in 1788, and nonferrous metal mining 
started almost 150 years ago. With this 
long tradition of mining and experience 
in mining and smelting, it can be ex- 
pected that Australia will be able to 
recruit skilled labor, train the un- 
skilled from the unemployed labor force, 
or retrain other unemployed workers. 
(The unemployment rate was 6.1% in 1980.) 
However, many mining companies and mining 
industry trade associations have men- 
tioned their increasing concern with 
present and potential shortages of 
specialized personnel to meet the skilled 



labor requirements of the industry. The 
anticipated demand for highly trained 
specialists and technicians and for 
skilled workers is expected to exceed 
available workers at local levels. 

It is estimated that, with any upsurge 
in demand for Australian minerals, the 
mining industry will need hundreds of 
additional engineers, laboratory techni- 
cians, geologists, mining engineers, 
metallurgists, and other mineral scien- 
tists during the coming decade, but the 
number of students studying these disci- 
plines is far below the requirements. 
Following the collapse of the previous 
minerals industry boom in the early 
1970' s, many recent graduates in engi- 
neering and mining fields were unable to 
find appropriate jobs, and the number of 
students entering these fields subse- 
quently dropped dramatically. ^ 

Shortages in the numbers of skilled 
workers could pose even more acute prob- 
lems. Fitters, mechanics, metalworkers, 
draf tpersons, electricians, and other 
skilled workers are already very much in 
demand both inside and outside the min- 
eral industry. Company and government 
efforts to provide training for unem- 
ployed workers have had only limited suc- 
cess to date. Efforts to increase the 
number of immigrants with the required 
skills have run into strong opposition 
from elements of the present work force. 

The impact of the labor shortages will 
fall unevenly on the mining industry be- 
cause mines that are more profitable 
and/or located in less remote areas will 
be able to attract skilled workers from 
less desirable locations. The mines in 
the remoter tropical areas of Western 
Australia, Queensland, and the Northern 
Territory will find it hardest to attract 
key personnel. 

Another concern on the labor scene is 
the industrial labor relations. The 
total labor force is 55% unionized. The 

5 U.S. Embassy, Canberra, Australia. 
Industrial Outlook Minerals - Austra- 
lia. State Department Airgram 125, 
Aug. 12, 1981. 



figure is higher for the mineral industry 
segment. Almost all workers at the major 
mines belong to unions. Often one union 
does not cover all the workers at a mine 
or plant, and, management must negotiate 
wages and working conditions with as many 
as half a dozen unions. Work stoppages 
are fairly frequent and add a consider- 
able cost to mine and plant operations. 

The rapid anticipated growth of the 
mining industry will place even greater 
strains on labor relations because expe- 
rienced miners and skilled workers will 
be in short supply. This would also in- 
crease demands on wages , which are al- 
ready high in comparison with such coun- 
tries as Brazil, Mexico, and Peru, which 
would compete with Australia in the 
export market. 

The average weekly base salary for min- 
ing and quarrying has recently been esti- 
mated at $246,6 a bove the average wage of 
$205 for all industry groups. Overtime 
and fringe benefits are additional. 
Including overtime, the annual average 
wage of a mine worker is estimated at 
$21,000. However, this figure covers 
workers in small as well as large under- 
takings. In the latter group, such as 
the large coal and iron mines , workers 
may earn $35,000 to $46,000. Also the 
average figure does not include sub- 
sidized housing and other benefits. 

In an analysis of Australian labor 
costs in comparison with those in other 
developed countries , the report by the 
Australian Trade Development Council con- 
cludes as follows: 

It appears from this comparison that, 
measured on a currency adjusted ba- 
sis, Australia's labor costs in the 
metals processing industries are not 
significantly lower than those of the 
USA, Japan and Belgium, commensurate 
with those of the UK, France and 
Italy. 

b Where necessary, values have been 
converted from Australian dollars ($A) to 
U.S. dollars (US$) at the rate of 
$A1 .00 = US$1.16. 



10 



This report states further that labor 
costs in South American nations and Mex- 
ico are substantially less than in Aus- 
tralia. Although wage rates in Brazil 
are considerably higher than in the other 
nations, they remain well below Austra- 
lian equivalent rates. 

The low labor costs in Brazil are sig- 
nificant because Brazil is a competitor 
for iron ore, bauxite, and manganese in 
world markets. Equally significant are 
the wage rates in Mexico and Peru, two 
countries that compete with Australia in 
the lead-zinc market. Labor costs in the 
Republic of Korea, which is emerging as a 
steel producer, are also lower than in 
Australia. In December 1980, the monthly 
wage in Korea for mining, using 660 won = 
1US$, was $476 for metal mining and $401 
for iron and steel. 

Capital 

A survey of major manufacturing and 
mining investment projects published in 
December 1981 by the Department of Indus- 
try and Commerce of Australia lists 
366 projects totaling $38 billion in the 
"committed" or "final feasibility" cat- 
egories. For the "committed" category 
any one or combination of the following 
factors apply: construction is proceed- 
ing, construction is expected to commence 
shortly, Company Boards approvals have 
been given, studies have established the 
economic viability of markets, or con- 
tracts have been secured and the decision 
to proceed is expected shortly. The 
"final feasibility" category". . .indicates 
that advanced studies to establish eco- 
nomic, technical and engineering viabil- 
ity are at present being undertaken and 
approval for construction to commence is 
likely to be authorized in the next 1-3 
years." 7 The projects are overwhelmingly 
in the mineral area. The projects listed 

'Australian Department of Industry and 
Commerce. Major Manufacturing and Min- 
ing Projects, December 1980 and 1981 Sur- 
veys. Australian Government Publishing 
Service, Canberra, December 1980 and 
December 1981 . 



in the 1980 and 1981 surveys were as fol- 
lows, in billion dollars: 

1980 1981 



Oil and gas 10.40 10.40 

Coal. 10.80 12.80 

Base metals including baux- 
ite, alumina, and aluminum 8.80 7.05 

Iron ore 2.84 .85 

Uranium 1.42 1.30 

Coal and oil and gas account for the 
lion's share of the planned investments. 
Review of the projects, other than fossil 
fuels and nonmetallic minerals, shows 
that, except for investments in the ex- 
pansion of existing or building of new 
aluminum plants and a vanadium extraction 
plant, there are no "committed" projects 
designed to shift materially the Austra- 
lian exports of ores and concentrates 
(copper, iron, lead, tin, tungsten, and 
zinc) to the respective metals. The 
projects for iron ore and base metals 
have also been revised downwards. 

For manganese, the 1980 survey listed a 
project to cost about $420 million to 
expand the production of ferroalloy and 
related products at the Bell Bay plant in 
Tasmania from 148,000 tons in 1981 to 
746,000 tons in 1990. But this project 
has been abandoned indefinitely. For 
base metals, the listed projects are for 
exploration, reserve assessment, and 
increased ore and concentrate production 
but not in new smelting facilities. In 
iron and steel, the steel capacity of the 
smelter at Port Kembla will be increased 
from 3.8 to 5.9 million tons. Other iron 
and steel planned expenditures are for 
improvements and modernization of facil- 
ities. The expansion of the Cockle Creek 
zinc smelter is at the preliminary stud- 
ies stage, which means construction is 
"...unlikely to commence for three or 
more years." 

Compared to the magnitude of the in- 
vestment foreseen above, the capital 
requirements for further processing 
of the base metal ores and ores of 
manganese, tin, tungsten, and nickel, 



11 



currently produced in Australia and ex- 
ported in nonprocessed form, will be 
modest because, as shown in table 2, 
export tonnages of ores and concentrates 
are not large except for bauxite, 
alumina, and iron ore. 

Examining the data in table 2, and for 
the moment ignoring bauxite, alumina, and 
iron ore, it would appear that in terms 
of the current situation, the industry 
may well consider adding the following 
estimated capacities in producing primary 
metals to absorb concentrates and other 
intermediate forms now exported: Copper 
50,000 tons; lead 30,000; nickel (sul- 
fide ore) 25,000 to 30,000; tin 7,000; 
zinc 250,000. 



Based on the compilation of information 
and data assembled for the study of the 
Australian Trade Development Council, one 
may assume that for the purpose of rough 
estimation the following figures are the 
probable investment cost per annual ton 
of installed capacity in U.S. dollars: 

Copper smelter and/or 

refinery 5 ,000 

Lead smelter and/or refinery 1,000 

Zinc smelter and/or refinery 2,500-3,000 

Nickel smelter (sulfide ore) 3,500-4,000 

Tin smelter 1 ,500 

Using these figures, the investment 
cost for additional smelting capacities 
is estimated in table 3. 



TABLE 2. - Exports of ores and concentrates from Australia 

(Thousand metric tons) 



1979 



1980 



1981« 



Bauxite 

Alumina 

Copper ore and concentrate 1 

Iron ore, pellets, etc 

Lead ore and concentrate 1 

Manganese ore 

High-carbon f erromanganese 

Nickel matte 1 

Tin ore and concentrate 1 .... 

Tungsten (scheelite and wolframite) 

Zinc ore and concentrate 

e Estimated. 1 Metal content. 



7,000.0 

6,534.0 

45.0 

78,332.0 

38.8 

1,157.0 

32.0 

25.0-30.0 

6.4 

5.5 

189.8 



7,500.0 

6,994.0 

47.0 

79,753.0 

28.2 

1,328.0 

23.0 

25.0-30.0 

7.4 

6.3 

276.4 



7,500.0 

6,509.0 

50.0 

71,148.0 

31.0 

900.0 

18.0 

25.0-30.0 

7.3 

6.6 

260.0 



TABLE 3. - Estimated investment costs for expansion of production of 
selected nonferrous metals 



Commodity 



Capacity, 


Investment, 


metric tons 


million 


dollars 


50,000 




250 


30,000 




30 


25,000-30,000 




10 


15,000 




10 


250,000 


600- 


-650 




900- 


-950 



Copper 

Lead 

Nickel (sulfide ore) 

Tin 

Zinc 

Total 



12 



Should domestic production of these 
ores increase, as is expected, the capi- 
tal requirements would also increase. 
Although the Australian Bureau of Mineral 
Resources has projected growths in pro- 
duction of a number of Australian min- 
erals through 1990 and 2000, it is not 
certain whether the increases will in 
fact be realized in the short run and 
thus lead to serious consideration 
of establishing additional processing 
capacity. 

Australia's exports of manganese ore 
represent roughly 800,000 to 850,000 tons 
of ferromanganese, which is roughly the 
projected expansion at Bell Bay ferroal- 
loy plant and the level of current pro- 
duction of the Republic of South Africa. 
With the competitive advantages that 
South Africa has in the ferroalloy indus- 
try, it would seem that expansion in pro- 
duction of ferromanganese at Bell Bay 
would be for the use of the domestic iron 
and steel industry. The growth trend in 
world demand for ferroalloys , which fol- 
lows iron and steel demand, is expected 
to be modest. Regarding iron ore, infor- 
mation indicates that the expansion plans 
of Australia's principal steel producer 
are to meet domestic needs and not to 
project Australia as a steel exporter, 
presumably because of the world steel 
situation. 

The costs of the nonfuel projects 
listed in the 1980 and 1981 surveys total 
$9.2 and $13.1 billion respectively, of 
which it is estimated that about $1 bil- 
lion will be for expansion of nonferrous 
metals, other than aluminum. 

Despite the magnitude of capital re- 
quirements and barring radical change in 
investment policy, the availability of 
capital should not be a constraint. Well 
over half of the capital requirements for 
mineral projects in Australia has tradi- 
tionally come from overseas sources as 
either loans or equity investment. Gen- 
erally, international lending institu- 
tions are interested in participating in 
Australian resource developments and are 
prepared to lend large sums of capital to 
major Australian projects. For example, 



a group of major banks recently made over 
$1 billion available to the North West 
Shelf gas project. Other project devel- 
opments are also currently benefiting 
from major foreign loans. The Australian 
capital market has also been willing to 
participate in the minerals sector devel- 
opment and will probably provide a grow- 
ing proportion of the funding needs for 
major mineral projects. 

The magnitude of funds coming into the 
country during the next few years is, 
however, a matter of concern to some Aus- 
tralian economists and companies in other 
sectors of the economy. Unless offset by 
a rapid increase in imports or other bal- 
ancing capital outflows, the new funds 
may well lead to an appreciation of the 
value of the Australian dollar and/or 
increase rates of inflation. The results 
could make some Australian minerals and 
goods less competitive on the world mar- 
ket. But this concern is not shared by 
Government officials, who believe that a 
strong exchange rate would help maintain 
a lower overall inflation rate, which 
would in turn enable Australian indus- 
tries to remain competitive. Long-term 
and stable policies on investment, taxa- 
tion, incentives such as assistance in 
creating the necessary framework in re- 
mote areas , and exchange rate stability 
are factors that investors have to take 
into account because of the long delay 
between investment and production in the 
mineral industry. Equally important are 
policies of the State governments , which 
have wide powers in the industries 
located within their States. In these 
respects, Australian policies present a 
favorable climate for investment for min- 
eral development , including the expansion 
of processing facilities. 

Foreign Equity 

Funding the development of all Austra- 
lian resources from internal sources has 
not been possible because of the limited 
size of Australia's capital markets and 
the large sums needed. Thus, the Govern- 
ment adopted a liberal approach in the 
late 1960 »s and early 1970 's toward for- 
eign investment, and as a result, sizable 



13 



foreign capital was injected in Austra- 
lia's mineral development. Tax policies 
during this period allowed accelerated 
writeoffs of development expenditures. 
The magnitude of foreign capital invested 
in Australian mineral development dur- 
ing 1960-80 is estimated at $9 to 
$12 billion. 

This permissive policy on foreign in- 
vestment was changed following the acces- 
sion to power by the Labor Party in 
December 1972. While the restrictive 
policy initiated in 1972 has not been 
fully followed by the present government, 
guidelines have been established for for- 
eign investments. The Foreign Investment 
Review Board reviews all aspects of for- 
eign investments and acts in an advisory 
capacity to the Australian Government. 
A new minerals' -processing project by 
foreign interests involving a total in- 
vestment of $5 million or more would be 
subject to consideration under the 
Government's policy on foreign invest- 
ment. For new mining projects, other 
than uranium, a minimum of 50% Australian 
participation, with Australian interests 
to have 50% of the voting rights on the 
board, is required. These requirements 
increase to 75% in the case of uranium 
mining. However, the guidelines are 
flexible enough to allow worthwhile 
projects to be developed if Australian 
equity is not available on fair and 
reasonable terms. 

The foreign investment guidelines are 
administered under administrative rather 
than statutory provision (as with foreign 
company takeovers). The guidelines are 
based on periodic Government policy 
announcements, with controls administered 
case by case. While pragmatic, such 
arrangements also create uncertainty. 

Owing to the division of power between 
the Federal and State governments, 
neither alone oversees all mineral activ- 
ities. The need for the coordination of 
the various State government laws, in 
order to form a coherent Federal-State 
policy, has been pointed out by organiza- 
tions such as the Australian Mining 
Industry Council. Such a coordination 
would be helpful to mining companies 



that face different State laws and 
discrepancies as to State policies , as 
occurs when a company mines deposits 
located in more than one State. 

With regard to approval procedures, the 
Federal Government is responsible for 
foreign investment policy, which aims to 
encourage partnership between foreign and 
Australian companies and for the guide- 
lines for foreign capital participation. 
The Federal Government also exercises 
control over the mineral industry through 
the approval or denial of mineral export 
contracts. Without an export contract, a 
company can market only within Australia. 
Federal control of exports is designed to 
ensure that domestic producers receive 
world prices and that no deals are made 
that would be harmful to other producers 
of the same commodity. The Federal Gov- 
ernment also participates in various 
international commodity groups (e.g., 
International Bauxite Association and the 
Association of Iron Ore Exporting Coun- 
tries), not with a view to fix prices but 
"...unilaterally with the objective of 
ensuring world marketing, and establish- 
ing world prices at equitable and re- 
munerative levels . " 

Mineral rights are held by the Federal 
Government, but the right to exploit min- 
erals is vested in the States. Hence, 
once the investment is approved by the 
Federal Government and an export applica- 
tion contract is approved, the investor 
would approach the State government to 
obtain an exploration right and mining 
lease, to negotiate royalty payments, 
which may be a flat rate or a percentage 
rate of the value, and to provide mining 
infrastructure including transportation, 
communication, and utilities. Admin- 
istration of health, safety, and environ- 
mental regulations and standards also 
falls within the State's responsibil- 
ities. In fact, a mining company's con- 
tacts during the mining operation are 
with the State authorities. 

Energy 

Australia has large resources of coal, 
lignite, oil shale, and uranium and is a 
net exporter of energy in the form of 



14 



coal. Coal is the dominant energy 
source. Domestic petroleum and natural 
gas provide 70% of oil and all of the 



natural gas consumed. Production of fos- 
sil fuels in 1979 and 1980 follows: 



1979 1980 
Coal: 1 Bituminous and subbituminous 

(salable) thousand tons.. 74,993 76,304 

Brown coal do 32,597 32,895 

Petroleum million barrels.. 159 140 

Natural gas.... billion cubic feet.. 260 378 

'Raw coal production was 93 million tons in 1979, 
93.4 million tons in 1980, and 111 million tons in 1981. 



Australia's total primary energy 
requirements in 1980 were estimated at 
75.2 million tons of oil equivalent 
(about 1,500,000 barrels oil equivalent 
per day) and are expected to increase to 
108.5 million tons of oil equivalent 
(about 2,100,000 barrels per day) in 
1990. The shares of coal, including 
brown coal and petroleum in the total 
1980 primary energy requirements were 39% 
and 42% respectively and are expected to 
be 31% and 43% respectively in 1990. 
Natural gas may have accounted for 13% of 
primary energy requirements in 1980 and 
is expected to increase its share in the 
next decade. Australia's demonstrated 
(measured and indicated) recoverable re- 
serves of coal amount to about 29 billion 
tons, about 5% of the world total. Coal 
deposits are concentrated in the Bowen 
Basin in eastern Queensland and the Syd- 
ney Basin in New South Wales, both near 
industrial centers and ports, making Aus- 
tralia's coal easily accessible to domes- 
tic and foreign markets. 

With a 1980 output of 93.4 million tons 
of raw coal (76.3 million washed and 
salable), Australia ranks eighth among 
world producers. Australia also ranks as 
the second world coal exporter after the 
United States. Of the 1980 production, 
some 50 million tons was mined in New 
South Wales (37 million tons from under- 
ground mines) and 37 million tons in 
Queensland (33 million tons from opencast 
mines). In 1980, approximately 48% of 
Australian coal production was consumed 
domestically, and 75% of this consumption 
was for generating electricity. Coal 
provided about 70% of the energy input 



for electricity generation. Coal use 
for electricity generation will increase. 

Large reserves, favorable location, and 
new large modern mines augur well for the 
coal industry's future. Countervailing 
disadvantages are labor problems (fre- 
quent strikes), inadequate port and load- 
ing facilities in New South Wales, and 
high port charges. 

Australia's proved, probable, and pos- 
sible oil reserves have been estimated at 
a total of 299 million tons of oil equiv- 
alent (Mtoe) , with remaining undiscovered 
reserves estimated at between 132 and 
529 Mtoe. Proved, probable, and possible 
reserves of natural gas amount to 
1,000 Mtoe, and the Government's esti- 
mates of remaining undiscovered reserves 
range between 600 and 900 Mtoe. 

Oil will continue to be a major source 
of energy and is expected to provide 
about one-third of energy requirements in 
2000. Because of anticipated increased 
consumption, self-sufficiency may decline 
from the present 70%, unless current 
exploration result in significant 
discoveries. 

Another bright aspect of Australian 
energy is natural gas reserves. Natural 
gas is expected to have the highest 
growth among energy sources in the 1980- 
90 decade and to contribute to reducing 
Australia's dependency on oil. It is 
already a major contributor to the energy 
needs of Adelaide and Sydney (Cooper 
Basin), Melbourne (Gippsland Basin), 
Brisbane (Surat Basin of Queensland), 



15 



Perth (Dongara Basin) , and other popula- 
tion centers. Of major importance for 
future domestic consumption in Western 
Australia and export is the North West 
Shelf gas deposit. The project to 
develop this resource is expected to mar- 
ket 385 million cubic feet of gas per day 
for distribution within Western Australia 
beginning in 1984. 

Abundant as Australia's fuel resources 
are, a distinction must be made between 
resources and installed power capacity to 
meet the requirements for expanded proc- 
essing, particularly for alumina-aluminum 
conversion. It is apparent that power- 
plant construction has lagged behind 
requirements. Recent electrical power 
failures in New South Wales and Victoria 
gave some indication of how precariously 
demand and supply are balanced in these 
key industrial areas. With the creation 
of major new power-intensive industries 
such as aluminum smelting, demands on the 
power grid will mount substantially and 
delays in implementation of new gen- 
erating capacity could limit the rate at 
which some of the new processing indus- 
tries would come on stream. The Austra- 
lian Senate Report on the Development of 
Bauxite, Alumina, and Aluminum Indus- 
tries 8 states that the State governments 
will also have to face increasing criti- 
cism from various groups about the 
alleged low price some mineral-processing 
industries are paying for power and 
whether too much of the new generation 
capacity is being allocated to export- 
oriented undertakings rather than to the 
needs of the general public. In January 
1982, a critical power shortage was 
reported in New South Wales. Information 
on energy charges for industrial users is 
not available, and it is not known 
whether in fact price concessions are 
given to industrial consumers. The sig- 
nificant fact is that needed powerplants, 
for example for the projected alumi- 
num smelters , have not been built or 

"Australian Senate Standing Committee 
on National Resources. The Development 
of Bauxite, Alumina and Aluminum Indus- 
tries. Australian Government Publishing 
Service, Canberra, 1981, pp. 20-21. 



completed. Escalating construction and 
equipment costs may result in high power 
costs when the plants start producing. 
At this time, it is moot to state whether 
Australia, in spite of vast fuel re- 
sources, is or will be a low-cost 
electricity producer. In this connection 
the Australian Senate Report states: 

The price paid for electricity by 
aluminum smelters has been the single 
most controversial energy question 
arising out of the whole development. 
The controversy has arisen out of the 
widespread belief that the community 
at large is subsidizing the provision 
of electricity either directly, in 
that the price is less than the cost 
of production, or indirectly in terms 
of income foregone in that various 
factors of production, but particu- 
larly coal and capital, are not being 
valued at their opportunity cost. 
These fears have been exacerbated by 
the confidentiality surrounding the 
terms of the contracts between 
Queensland and New South Wales 
authorities and the smelters in those 
states. 

The same report states that the Treas- 
ury is generally critical of rates of 
return on capital achieved by electricity 
authorities: 

...the rates of return earned on the 
funds employed by electricity 
authorities are typically low com- 
pared with those achieved in the 
private sector. That, in turn, sug- 
gests that the authorities have been 
(and presumably remain) prepared to 
contemplate investments offering low- 
er rates of return than the average 
earned elsewhere in the economy. For 
this situation to change, and new 
investments by Government authorities 
to be subject to similar standards of 
financial evaluation as private sec- 
tor investments , it would be neces- 
sary for the authorities to employ 
real discount rates much closer to 
the 10 percent or so common in the 
private sector. 



16 



Discount rates closer to 10% would mean 
higher energy prices. Available informa- 
tion indicates that electricity costs 
to processors would be lower if the 
State Electricity Commissions made price 
concessions. 

Infrastructure 

Frequently the mineral industry must 
provide its own infrastructure, such as 
housing, roads, railways, and various 
community facilities and services , in re- 
mote areas where mines, mills, or smelt- 
ers are located. It is indeed the gen- 
eral policy that infrastructure should be 
provided by the mining company, and it 
has been estimated that infrastructure 
items have averaged close to 65% of the 
total capital outlay for Australian min- 
eral developments. Providing transporta- 
tion facilities from mine to ports or 
consumption points is the most onerous 
infrastructure cost. One area of concern 
is the adequacy of existing or proposed 
port handling facilities. Low-interest 
loans to mining companies for the devel- 
oping infrastructure, not otherwise 
available, have been suggested to assist 
the industry. Another is consideration 
of some kind of a reduction in royalty 
rate based on the amount of infrastruc- 
ture that a company must provide. 

Government borrowing to finance infra- 
structure projects associated with 
resource development is being considered, 
subject to special consideration by a 
Loan Council on which the Australian and 
State governments are represented. Such 
borrowing must meet the guidelines 
approved by the Loan Council. The guide- 
lines allow proposals that satisfy three 
conditions: The loans would be such as 
could not be reasonably accommodated by 
the State government or a quasi- 
government body, would provide services 
of kinds normally provided by government 
or public utility enterprises, and, 
finally would have special significance 
for regional development. Within these 
guidelines, the Loan Council in November 
1978 approved borrowings to provide rail- 
ways and water facilities associated with 
the establishment of a bauxite-alumina 
project at Worsley, Western Australia, 



and special borrowings to provide for ad- 
ditional electrical generating capacity 
in Queensland, New South Wales, Victoria, 
and Tasmania. 

Transportation 

Much of Australia's mineral production 
must be transported a great distance from 
an inland processing plant to a shipping 
port or by coastal shipping to a process- 
ing plant such as the Cockle Creek smelt- 
er, Port Pirie refinery, or Risdon 
refinery. The movement of ores and con- 
centrates to principal destinations is 
shown in table 4. Information on land 
transportation costs and coastal shipping 
costs is not available, but these costs 
are assumed to be considerable for com- 
modities such as copper, lead, nickel, 
and zinc, with mines and mills at great 
distances from ports and smelters located 
at or near ports. For alumina and iron 
ore, the important nonfuel export com- 
modities, transportation distances over 
land are modest and therefore should not 
prove a competitive disadvantage for 
Australia in its desire to process these 
commodities prior to export. The coal 
industry also has the advantage of 
proximity to shipping ports. 

More significant in Australia's com- 
petitiveness is shipping cost to consumer 
destinations. Metals are shipped by lin- 
er ships, and bulk commodities, such as 
iron ore and bauxite, by bulk shipping. 
Australia is generally well served by 
reliable and frequent liner shipping ser- 
vices. Shipping costs in relation to the 
f.o.b. price of metal commodities are 
small, and metals can tolerate small 
freight differentials. In fact, shipping 
service may be as important as the 
freight rate. For bulk commodities, port 
facilities and the size of ship that can 
be accommodated are particularly impor- 
tant in reducing shipping costs. The 
adequacy of existing or proposed port 
handling facilities is an area of major 
concern, especially for coal exporters. 
There are frequent and costly delays in 
loading coal. Various projects are 
designed to overcome port shortcomings, 
but some port expansions have been 
delayed. 



17 



TABLE 4. - Mineral and metal transportation in Australia 



Commodity and location 



Destination 



Approximate dis- 
tance , km 



BAUXITE 




To Gladstone alumina refinery by 
coastal shipping; direct export as 
bauxite. 


3,000 (sea 
transport) 


Gladstone alumina, 
Queensland. 


Export from Gladstone as alumina; 
shipment to Bell Bay smelter in Tas- 
mania by coastal shipping. 


2,500 (sea 
transport) 


Gove Mine, Northern 
Territory. 


Conveyor belt to alumina plant; export 
as bauxite and alumina. 


19 


Jarrahdale mine, Western 
Australia. 


Railed to Kwinana alumina refinery for 
export; some alumina to Point Henry 
aluminum smelter. 


51 


Huntly and Del Park Mine, 
Western Australia. 


Bauxite from Huntly and Del Park mines 
by conveyors to Pinjarra alumina 
refinery. 


Insignificant 



COPPER 



Anode copper from Mount Isa 
Mine , Queens land . 

Concentrate from Co bar, New 
South Wales. 

Concentrate from Woodlawn, 
New South Wales. 

Concentrate from Teutonic 
Bore, Western Australia. 



Concentrate from Tennant 
Creek, Northern Territory. 



Railed to Townsville copper refinery, 
Queensland. 

Railed to Port Kembla smelter, New 
South Wales. 

do 



Trucked to Lenora and railed to Port 
Esperance 60 km for shipment by sea 
to Port Kembla smelter, New South 
Wales. 

To Mount Morgan smelter, Queensland... 



960 
600 
NA 
NA 

2,500 





IRON ORE 




Mount Newman, Western 


Railed to Port Hedland, Western Aus- 


427 


Australia. 


tralia, for export. 




Mount Goldsworthy, Shay 


Mine site connected by 180-km railroad 


180 


Gap, Sunrise Hill, West- 


to Port Hedland. 




ern Australia. 






Mount Tom Price and Para- 


Mount Tom Price connected to Dampier 


293 


burdo, Western Australia. 


by 293-km rail link; Paraburdo con- 






nected to Tom Price by 100-km rail 


397 




link. 




Pannawonica (Robe River) , 




169 


Western Australia. 







LEAD 



Bullion from smelter in 

Mount Isa Mine, 

Queensland. 

NA Not available. 



Railed to Townsville, Queensland, for 
shipment to United Kingdom for 
refining. 



960 



18 



TABLE 4. - Mineral and metal transportation in Australia — Continued 



Commodity and location 



Destination 



Approximate dis- 
tance , km 



LEAD — Continued 



Concentrate from Broken 
Hill, New South Wales. 



Do, 
Do, 



Concentrate from Woodlawn, 
New South Wales. 



By rail to Port Pirie smelter, South 
Australia. 

Cockle Creek smelter, New South Wales, 

To Risdon refinery in Tasmania by 
coastal shipping. 

To Cockle Creek, New South Wales, 
smelter by rail; concentrate also 
exported. 



500 

1,200 
1,200 

500 



MANGANESE 



Groote Eylandt, Northern 
Territory. 



Export as ore; shipment to Bell Bay 
ferromanganese plant, Tasmania, by 
coastal shipping. 



Insignificant 



NICKEL 



Concentrate from Kambalda 
and other mines, Western 
Australia. 

Concentrate from Agnew 
Mine, Western Australia. 

Nickel matte from Kalgoor- 
lie, Western Australia. 

Ore from Greenvale Mine, 
Queensland. 

Concentrate from Mount Win- 
darra Mine, Western 
Australia. 



Kalgoorlie smelter, Western Australia. 



Transported by road to Leonora and 
then railed to Kalgoorlie, Western 
Australia. 

Railed to Kwinana refinery, Western 
Australia. 

Railed to Yabulu refinery, Queensland. 



Road hauled to Malcolm and then railed 
to Kalgoorlie. 



Insignificant 

130 to 260 

640 
200 
95 



TIN 



Concentrate from Renison 
Bell, Mount Cleveland and 
other mines, Tasmania. 



Shipped as concentrate to smelter in 
Sydney by coastal shipping. 



NA 



ZINC 





Concentrate railed to Townsville, 
Queensland, for export; also by 
coastal shipping to Risdon refinery 
in Tasmania. 


960 


Broken Hill, New South 


Concentrate railed to Port Pirie, 


500 


Wales. 


South Australia; concentrate by 
coastal shipping to Risdon refinery 
in Tasmania; concentrate to Cockle 
Creek smelter, New South Wales. 




Woodlawn, New South Wales.. 


Railed to Cockle Creek smelter, New 
South Wales. 


500 



COAL 



Moura deposits, Queensland. 
Singleton, New South Wales. 



Railed to Rockhampton, 



Railed to Newcastle, 



250 

10 - 100 



NA Not available. 



19 



Because of Australia's geographical 
location, it is well located to supply 
Japan, Korea, Taiwan, and the Southeast 
Asia countries. This results from the 
fact that, whereas prior to the increase 
in oil prices, the shipping distance was 
not the major factor in the cost, fuel 
costs may in some cases account now for 
40% of the shipping costs. 

The best available analysis of the role 
of shipping in determining the world 
competitiveness of Australia's ore and 
metals is provided by the report of the 
Australian Trade Development Council, ^ 
whose summary statement follows: 

In liner shipping, the level of ship- 
ping service provided can be as crit- 
ical as the actual freight charged. 

Comparisons of liner freight rates 
between Australia's trades and com- 
peting countries to Australian ex- 
porters ' markets are extremely 
difficult. However, from the infor- 
mation available and evidence 
studied, it is apparent that the com- 
petitiveness of Australian shippers 
for the commodities examined, is not 
generally being disadvantaged in a 
significant way by differences in 
liner freight rates. 

The effect of increases in fuel costs 
on the competitiveness of exports 
particularly for the bulk minerals 
commodity trades is to constantly 
reinforce the trend to advantage sup- 
pliers that are closer to the major 
trading markets. For Australian ex- 
porters this may mean relatively 
higher costs of shipping to Western 
Europe and the USA compared with say 
South American suppliers but rela- 
tively lower costs of shipping to 
Japan and other regional markets as 
compared with other suppliers. Simi- 
lar considerations apply in respect 
of liner trades. 

This is encouraging a greater degree 
of regionalization of trade flows 

•3 — ■ — 

3 Work cited in footnote 3. 



which should become increasingly 
apparent in generally benefiting 
Australian exporters in the Austra- 
lia/Japan and other Asian trades and 
in terms of tending to weaken Austra- 
lia's position relative to other sup- 
pliers closer to the Western Europe 
and U.S. markets. However, this 
needs to be qualified by the extent 
to which advantage can be taken of 
economies of scale for specific 
trades, the cost differentials be- 
tween trades relative to the landed 
cost of the goods shipped and day- 
to-day developments that may alter 
the balance of trading for shipping 
companies . 

Tariffs 

Tariffs of principal importing coun- 
tries can have restraining effects on 
efforts to increase the mineral process- 
ing of raw materials in countries that 
produce them for export. Generally, 
tariffs increase with the degree of proc- 
essing. For Australia, the tariff struc- 
tures of the European Community (EC) , 
Japan, and the United States are 
important, since these countries are the 
principal markets for Australian minerals 
and metals. 

Imports of ores and concentrates into 
these countries are free except for lead, 
zinc, and tungsten into the United States 
(table 5), and the tariff for metals 
ranges from zero to 9%. In view of this, 
the tariff level should not be a major 
disincentive for exporting metals instead 
of the ores and concentrates Australia 
currently exports. Other factors may be 
more important , depending on the commod- 
ity, as examined later under the commod- 
ity sections. However, for metals, Aus- 
tralia would have to consider whether 
because of Generalized System of Prefer- 
ences (GSP), a developing country enjoy- 
ing GSP from industrialized countries is 
a competitor to Australia in the export 
of a mineral or metal. For example, cop- 
per exports from Zambia or Zaire to the 
European Community and high-carbon ferro- 
manganese exports from certain countries 
to the United States would have tariff 



20 



advantages vis-a-vis Australian exports 
because the preferential rate of duty for 
the former countries is zero. The pref- 
erential tariff schedule would have a 
negative impact on copper exports from 
Australia because a number of countries 
that enjoy GSP are important copper sup- 
pliers to the Japanese and EC markets. 
This would not be the case for lead and 
zinc concentrates and metals, for which 
developing countries , with the exception 
of Mexico and Peru, are not large world 
suppliers. For bauxite-alumina and ores 
of iron, tin, and tungsten, which Aus- 
tralia currently exports, factors other 
than tariffs are more significant in a 
shift from concentrate to metals. 



Tariffs are important for semimanufac- 
tures such as bars , rods , and tubes , and 
other metal products because they are 
much higher — 8% to 12% and more. For ex- 
ample, the 6.6% (conventional) tariff in 
the EC on unwrought aluminum increases 
to 11.3% for bars, rods, etc. The 
3.5% tariff for lead (other than bullion 
for refining) increases to 9.3% for bars, 
rods and tubes, foils, etc. In Japan, 
tariff rates increase from 1.6 c/lb, or 
about 4% in 1981 prices, for unwrought 
zinc to 8% for tubes and pipes and to 12% 
for plates and sheets. Furthermore, 
countries with markets for processed 
forms have established plants and tech- 
nological advantages for producing them. 



TABLE 5. - Tariff levels of European Community, Japan and the United States 
for selected commodities 



Commodity 


United States 


EC 


Japan 


COPPER 






1.3% ad val. 

1% 












8.1% cif value 




4.5/lb 1 


A 


LUMINUM 










3% ad val. 




7.6% 

6.6% 







6.5% cif value 




9% cif value 


IRON 


AND STEEL 










.9% ad val. 




3.9% 

5.7% - 6.7% 







3.9% 




5.7% 


LEAD 






0.75/lb 
3.5% ad val. 
3.5% ad val. 




3.5% ad val. 







1.6/lb 1 




6.9% cif value 2 


MANGANESE 






1.6% ad val. 




4% 







11.69% cif value 


NICKEL 

















24.48/lb 1 


TIN 






















TUNGSTEN 




17/lb w 
12.1% ad val. 




NA 







5.7% 


ZINC 




0.53/lb zn 
1.8% ad val. 




3.5% 







1.6/lb zn 1 



NA Not available. 

2 For not more than $697.6 per ton. 



At the exchange rate of $100 = 230 yen. 



21 



ENVIRONMENTAL AND SOCIAL FACTORS 

The Environmental Protection Act was 
enacted by the Commonwealth Parliament in 
December 1974. Administrative proposals 
published in 1975 provide that an Envi- 
ronmental Impact Statement (EIS) may be 
required before new mining operations 
begin and that the responsible minister 
require that it be made available for 
public comment. According to information 
made available in 1980, more than 3,000 
proposals for new mining operations that 
could have an environmental impact had 
been examined under the provision of the 
act. Fifty proposals required an EIS, 
and two inquiries were held, one related 
to the Fraser Island sand-mining and the 
other to the Ranger uranium mining site. 

While the Federal Government has a gen- 
eral responsibility for environmental 
protection, the development of standards 
and the enforcement of such standards 
remain the responsibility of each State. 
As a result, standards imposed can vary 
substantially from State to State. Ef- 
forts to coordinate standards among the 
States have not been fully successful. 

Environmental considerations have be- 
come important to mineral development in 
Australia and for the siting of mineral- 
processing plants. Preparation of EIS's 
for every new mineral venture causes 
delays which, as a result of inflation, 
may significantly increase cost and 
impact adversely on the profitability of 
the venture. A plant proposed for loca- 
tion near a major city would become a 



special target for environmental criti- 
cism. This possibility limits flexibil- 
ity for locating plants at or near prin- 
cipal ports (which all, except Darwin and 
Hobart, are major population centers) 
with a view to treating ores from a num- 
ber of mines which individually would not 
find it economical to establish a proc- 
essing plant. 

Land use and access to land are of 
greater concern for mineral exploration 
and mining than for processing, because 
processing land requirements are modest. 
However, large sections of the Australian 
"outback" comprise reserved areas or 
other aboriginal land holdings. Unlike 
most landholders elsewhere in the coun- 
try, aborigines on the reserves generally 
hold the mineral rights to their lands. 
Some portions of the reserves have been 
closed to exploration or mining develop- 
ment, while other areas are subject to 
stringent restrictions on any mining- 
related activities. According to some 
reports , over 40% of the Northern Terri- 
tory is now or soon may be covered by 
aboriginal land holdings. In late 1980, 
the South Australian government negoti- 
ated an arrangement with local aboriginal 
groups, setting aside a vast area in the 
northwest corner of that State as a 
reserve, with only certain sections being 
available for mineral exploration. While 
negotiations between mining companies and 
aboriginal leaders have often gone quite 
well, in some cases major mining projects 
have been delayed for months or years 
while talks continued. 



IMPLICATIONS OF INCREASED AUSTRALIAN MINERAL PROCESSING FOR THE UNITED STATES 



The Australian policy of maximum local 
processing of Its mineral raw materials 
is of particular significance to the 
United States from two viewpoints. 
First, this policy should result in 
increased U.S. capital investment in the 
Australian mineral industry. The capital 
requirements for expanding processing 
facilities cannot be met entirely from 
Australian sources. Foreign equity par- 
ticipation is necessary and envisaged. 
Judging by the record of the past dec- 
ade, U.S. sources will have a share in 



providing the foreign capital needs. 
U.S. sources would also have a share in 
supplying such capital goods and technol- 
ogy as are needed for the expansion 
projects and which are not currently 
available in the Australian market. 

The other aspect is the impact of the 
policy on the U.S. supply of minerals 
currently imported from Australia. Of 
these, bauxite-alumina and rutile are 
particularly important. 



22 



U.S. imports of alumina (excluding 
hydroxide) during 1978-81 averaged 4 mil- 
lion tons annually, with Australia 
providing about three-fourths of the 
total imports. Australia has plans for 
increasing aluminum metal production to 
2.7 million tons, which would require 
5.4 million tons of alumina; 7.25 million 
tons of alumina was produced in 1980. 
However, simultaneous with the aluminum 
expansion plan, alumina production is 
also expected to increase to 15 million 
tons by 1990. At this level, additional 
amounts of alumina over that required for 
the projected aluminum production would 
be 9.6 million tons. This alumina would 
be available for export. Therefore, 
increased aluminum production by Austra- 
lia should not deter supply of alumina to 
the United States, especially since U.S. 
companies account for about 70% of alumi- 
na production in Australia. However, 
aluminum produced in the United States 
would encounter competition from Austra- 
lian imports because 90% of the Austra- 
lian metal production is expected to be 
exported during 1990-2000. 

During 1978-81, U.S. imports of natural 
and synthetic rutile from Australia aver- 
aged about 80% of U.S. rutile imports. 
Sierra Leone and the Republic of South 
Africa are other U.S. suppliers, but they 
have limited production capacity. 
Production of titanium metal in Austra- 
lia, currently planned at 5,000 metric 
tons annually, would not adversely affect 
the Australian supply of rutile because 
production of rutile concentrate, at 
312,000 tons in 1980, exceeds consider- 
ably the estimated 10,000 tons needed for 
production of 5,000 tons of titanium. 
Doubling or trebling the titanium sponge 
production would still leave considerable 
surplus for export. A more important 
factor in the rutile picture is environ- 



mental restsraints 
production. 



on 



mineral sand 



For nonferrous metals other than 
aluminum — copper, lead, tin, and zinc — 
the Australian policy of maximum domestic 
processing would not adversely impact 
U.S. metallurgical industry and mineral 
supply. U.S. import needs for these 
commodities are substantially as metals 
rather than concentrates. Furthermore, 
the United States has alternate sources 
for the modest tonnages of ores and con- 
centrates of these metals that it imports 
for processing. 

Among the ferrous metals, if Australia 
switches from exporting manganese ore to 
exporting ferromanganese, it would 
adversely impact the production of ferro- 
alloys in the United States , aggravating 
a situation that has resulted primarily 
from the South African ferromanganese 
exports. It is expected that Australia 
will increase its exports of nickel. In 
the U.S. market, it would have to dis- 
place nickel from Canada. This may prove 
advantageous to the United States, as it 
provides an additional source of supply. 
As discussed later, Australia may not 
find it economically advantageous to opt 
for processing its tungsten to ammonium 
paratungstate for which the United States 
has a well-established position. 

Developments in the Australian iron ore 
and iron and steel industry would not be 
of immediate concern to the United 
States. U.S. imports of Australian iron 
ore are insignificant. Australia will 
remain a substantial world exporter of 
iron ore regardless of the expansion of 
the domestic steel industry, which is 
expected to be modest because of excess 
world capacity. 



COMMODITY REVIEWS 



BAUXITE, ALUMINA AND ALUMINUM 

Commodity Profile 

Australia has abundant and readily ac- 
cessible bauxite resources. According 



to the Australian Bureau of Mineral Re- 
sources, identified resources total about 
6,200 million tons. Of this, 2,700 mil- 
lion tons are classified as demonstrated 
economic resources and occur in the Weipa 
area of Cape York Peninsula, in the 



23 



Darling Range and Mitchell Plateau, and 
in the Gove Peninsula. Inferred economic 
resources in the Weipa area and in 
the Darling Range and the Kimberley dis- 
trict would add 1,700 million tons. 
Subeconomic resources total an addi- 
tional 1,700 million tons. In some 
cases, inferred reserves could be 
two or three times more than those 
published. 

Australia is also the world's leading 
bauxite producer, accounting for about 
31% of world production in 1980. By some 
Australian projections, production could 
double to 55 million tons by 1990 and 
almost triple to 76 million tons by 2000. 
The increased production of bauxite will 
be exported unprocessed, or upgraded to 
alumina for domestic refining into alumi- 
num or export. According to these pro- 
jections, about 20% of the bauxite, 
over 60% of the alumina, and 90% of the 



aluminum are expected to be exported 
during 1990-2000. 

In 1980, approximately 20 million tons 
of bauxite was converted to 7.25 million 
tons of alumina, which corresponded to 
22% of the world's output. Alumina 
production is projected to increase to 
15 million tons in 1990 and 21 million 
tons in 2000. Although with 303,500 tons 
of aluminum production in 1980, Australia 
accounted for 2% of the world's total, a 
dramatic increase is projected to 
1.0 million tons in the 1980' s, 2.7 mil- 
lion tons in 1990, and up to 4 million 
tons by 2000. 

The production of bauxite, alumina, and 
aluminum in Australia is controlled by 
large multinational companies. The five 
major participants and the respective 
shares of the participating companies in 
percent are shown in table 6. 



TABLE 6. - Principal Australian aluminum companies 



Company and location 



Ownership 

Alcan Aluminium Limited (Canada) 

Public 

Aluminum Company of America 

Western Mining Corp. Holdings, Ltd 

BH South Ltd 

North Broken Hill , Ltd , 

Other , 

Kaiser Aluminum & Chemical Corp. 

Conzinc Riot into of Australia Ltd , 

Public , 

Swiss Aluminium Australia Pty., Ltd , 

Gove Aluminium Ltd. (51% GSR Ltd., 13% Peko- 

Wallsend Ltd. , 36% Australian insurance 

companies and banks). 

Comalco Ltd , 

Kaiser Alumina Australia Corp , 

Alcan Queensland Pty . , Ltd , 

Aluminium Pechiny Australia Pty., Ltd , 



Percent 



Alcan Australia (Kurri Kurri 
smelter, New South Wales). 

Alcoa of Australia Ltd. 
(Jarrahdale, Del Park and 
Huntly Mines, Pinjarra and 
Kwinana alumina plants, West- 
ern Australia, Point Henry 
smelter, Victoria). 

Comalco Ltd. (Weipa Mine, 
Queensland and Bell Bay 
smelter, Tasmania. 

Gove Joint Venture (Gove Mine 
and alumina plant , Northern 
Territory). 



Queensland Alumina Ltd. 
(Gladstone refinery). 



70.0 
30.0 

51.0 
20.0 
13.1 
12.0 
3.9 



45.0 
45.0 
10.0 

70.0 
30.0 



30.3 
28.3 
21.4 
20.0 



24 



Analysis of Pertinent Factors 

Of all Australian mineral commodities, 
bauxite is most favored for achieving the 
Australian Government's goal of maximum 
processing. Much of the large bauxite 
reserves are in deposits close to the 
sea. Large coal and lignite deposits are 
available for power generation. The very 
energy intensive nature of aluminum 
production and current and anticipated 
high energy costs limit future expansion 
to countries with relatively low energy 
costs. High energy costs and environ- 
mental restraints may also cause capacity 
shutdowns in some industrialized coun- 
tries (e.g., Japan). These favorable 
factors are offset by high labor costs in 
Australia and its distance from consuming 
countries. Overriding all the above 
factors is the anticipated increase in 
demand for aluminum metal, which is the 
principal factor determining the future 
level of world bauxite-alumina produc- 
tion. Forecasts published by the U.S. 
Bureau of Mines in 1980 10 indicate a 
probable world demand for primary alumi- 
num of 31 million tons in 1990 and 
50 million tons in 2000, compared with 
installed capacity of about 20 million 
tons in 1980. These estimates indicate a 
gap of 11 million tons over the next 
decade. It would be reasonable to assume 
that Australia would provide a portion of 
the required new capacity and possibly as 
much as 2.7 million tons of the gap fore- 
cast for 1990, if other factors are 
favorable. 

Bauxite-Alumina 

The cost of transporting Australian 
bauxite to Europe and the United States, 
where it would meet competition from 
bauxite exported by Guinea and Jamaica, 
is the most important factor favoring 
refining bauxite to alumina in Australia 
before export. As already mentioned, 
transport of bulk commodities is sensi- 
tive to fuel cost and distance. With an 
alumina-bauxite weight ratio of 1 to 2, 



the transportation cost advantage of 
shipping alumina to distant markets is 
evident. Furthermore, alumina is priced 
substantially higher than bauxite: Aver- 
age value of crude and dried bauxite 
delivered to U.S. ports in 1980 was $32 
per ton, whereas that of alumina was 
$196 per ton. 11 Energy consumption for 
the conversion of bauxite to alumina, 
including crushing and grinding and 
energy content of lime and sodium hydrox- 
ide used in digestion, is modest and 
estimated at 42 x 10 6 Btu per ton of 
alumina produced. Bauxite refining is 
not labor intensive and therefore the 
high Australian wage scale is not prohib- 
itive for alumina refining. The economic 
advantages of this processing are clear 
from the dramatic growth of alumina 
production in Australia from 2.7 million 
tons in 1971 to 7.25 million tons in 
1980. By 1983, 1 million tons of new 
capacity can be expected from the new 
refinery of Worsley Alumina Pty., Ltd., 
and 360,000 tons from the expansion of 
the Gladstone plant. 

Alumina-Aluminum 

Reduction of alumina to aluminum is 
highly energy intensive. Energy require- 
ments per ton of aluminum for electroly- 
sis of alumina to aluminum, including 
energy needs of cryolite, the fluxes, 
carbon anode, and carbon cathode manu- 
fature, are estimated at 196.5 x 10 6 Btu, 
considerably higher than energy require- 
ments for other basic metal industries 
such as steel, copper, lead, and zinc. 
Energy accounts for one-third of the 
production cost of aluminum ingot. Com- 
pared with energy costs, labor trans- 
portation costs are modest because alumi- 
num refining is not labor intensive and 
ocean freight is a fraction of aluminum 
price, which was 66 to 76 cents per pound 
in 1980, as listed by U.S. producers. 
Information on the price of electricity 
for aluminum smelters is incomplete. In 
a paper presented in October 1980 to the 
International Aluminum Congress, J. A. 



^Kurtz, H. F., and L. Baumgardner. 
Aluminum. Ch. in Mineral Facts and Prob- 
lems 1980 Edition. BuMines Bull. 671, 
1981, pp. 9-34. 



'^Baumgardner, L. H., and R. A. Hough. 
Bauxite and Alumina. Ch. in Minerals 
Yearbook 1980, v. 1, 1981, p. 118. 



25 



Cook of Comalco Ltd. stated 12 that it is 
possible to produce electricity from Aus- 
tralian coal for 1.25 to 1.6 Australian 
cents (1.42 to 1.83 U.S. cents) per 
kilowatt-hour (kwhr). One does not know 
if these rates reflect actual production 
costs, what value is ascribed to the coal 
used, and what are the profit margins. 
There are, however, a number of indica- 
tions that electricity is cheaper in Aus- 
tralia than in many industrialized coun- 
tries. It has been stated that 
electricity prices for residential and 
commercial use are lower than in other 
member countries of the Organization for 
Economic Co-operation and Development. 
The average price of electricity in 
October 1981 in the United States for 
industrial consumers, but not for alumi- 
num smelters, was 4.4 cents per kwhr. In 
Japan the average price in 1979, not dif- 
ferentiated by consumers, was 5.9 cents 
per kwhr. For the Federal Republic of 
Germany the gross production value of 
electricity is about 9 cents per kwhr. 

The price of electricity in Australia 
is set by the Electricity Authorities of 
the States, which are knowledgeable about 
the industry's requirements for compet- 
itively priced and stable electricity 
supplies. Lower costs to smelters are 
justified because of a number of techni- 
cal factors. The smelters constitute a 
desirable form of a continuous base load 
with the highest thermal efficiency. 
Transmission and operating costs and 
transmission losses are also lower for 
electricity supplied to smelters. One 
may assume that, because of the lower 
costs, negotiated prices for aluminum 
smelters are lower than for other con- 
sumers. According to the Australian 
Senate Report, 13 the authorities' unwill- 
ingness to provide information on actual 
prices has caused public criticism. The 
public has been concerned about the pos- 
sibility of smelters being charged rates 
lower than those of other consumers, 
thereby giving the smelters a subsidy. 

-1 O 

1 ^Cook, J. A. Australia's Changing 
Role in the World Aluminum Industry. 
Proc. Internat. Aluminum Cong., Madrid, 
Oct. 1, 1980, pp. X(I)-X(VI). 

13 Work cited in footnote 8. 



The supply contracts make provisions to 
escalate the price in line with 
inflation. Provided inflation in Aus- 
tralia is not too much out of line with 
that in other industrialized countries, 
electricity costs to the smelters should 
remain competitive. 

Besides inflation, another factor that 
would increase future electricity costs 
is the capital cost of the additional 
powerplants that need to be installed and 
phased in over the next decade. For New 
South Wales four new powerplants with a 
total capacity of 1,700 megawatts are 
planned to be commissioned in 1981-87. 
Queensland and Victoria will also in- 
crease installed capacity. The escala- 
tion in the cost of such plants would 
change electricity rates , which at 
present reflect historical cost of 
supply. 

Reviewing these factors, it is reason- 
able to state that, at least for the next 
decade, Australia would have a compara- 
tive advantage for producing aluminum. 

COPPER 

Commodity Profile 

During the past decade, Australian cop- 
per mine production has remained remark- 
ably steady, fluctuating only slightly 
from an average of about 220,000 tons of 
contained metal annually. The industry 
is currently dominated by one mine, Mount 
Isa in Queensland, which accounts for 70% 
of the total mine production of copper 
and 85% of the country's copper refining 
capacity. 14 Other important producers 
include Mount Lyell in Tasmania, Mount 
Gunson in South Australia, Cobar and 
Woodlawn in New South Wales, Teutonic 
Bore in Western Australia, and Tennant 
Creek in the Northern Territory. Copper 
is recovered by leaching broken ore at 
the Gunpowder Mine in Queensland. Copper 
is also produced as a byproduct from the 
Rosebery lead-zinc mine in Tasmania, 
operated by E. Z. Industries Ltd., as a 
byproduct of tin mining by Cleveland Tin 
at Luina, Northwest Tasmania, and as a 

' 4 Work cited in footnote 8. 



26 



byproduct of nickel mining by Western 
Mining Corp., Western Australia. 

Copper ore is processed to anode at 
Mount Isa, smelted to blister at Mount 
Morgan and at Port Kembla, and refined at 
Port Kembla and Townsville. Between 75% 
and 80% of all copper production is 
processed domestically into blister or 
refined copper. About 60% of the metal- 
lic copper produced is consumed domesti- 
cally; the remainder is exported. Prin- 
cipal export markets include Japan, the 
United Kingdom, other EC countries, the 
United States, and New Zealand. 

Significant data on mine and metal 
production for 1980 are summarized in 
tables 7 and 8. The Cobar Mine has 
an expansion project underway that 
will increase its ore production capacity 
(currently 8,000 tons per day) by 50%. 
A new zinc-copper mine at Teutonic 
Bore, 80 km southeast of Leinster, 
began production in mid-1981 at a 
rate of 10,000 tons per year (copper 
content). 



Australia has a number of deposits that 
may be mined. These include Golden Grove 
Prospect south of Yalgoo in Western 
Australia with reserves of 15 million 
tons grading 3.4% copper, with a cutoff 
grade of 1%, the Olympic Dam deposit in 
South Australia, the Benambra deposit in 
Victoria, and the Goonumbla deposit in 
New South Wales. 

The copper-uranium-gold prospect at 
Roxby Downs in South Australia is con- 
sidered the most promising copper pros- 
pect in Australia. A feasibility study 
is underway and is expected to be com- 
pleted by 1983. The extent of the ore 
body is still unknown, but some informal 
estimates indicate reserves of at least 
500 million tons with 1.5% to 2% copper, 
0.05% uranium oxide, and 0.5 gram of gold 
per ton. If the project proves to be 
feasible and the companies decide to move 
ahead, Roxby Downs could begin produc- 
ing by the end of this decade at a 
rate of about 160,000 tons of copper 
annually. 



TABLE 7. - Australian copper production by company, 1980 
(Metric tons of metal content) 



Company 

Mines : 

Mount Isa Mines Ltd , 

Mount Morgan Ltd..... , 

Cobar Mines Pty . , Ltd , 

Mount Lyell Mining & Railway »Co. , Ltd 

Peko-Wallsend Ltd , 

Smelters: 

Mount Isa Mines Ltd , 

Mo • Mt Morgan Ltd... 

Electrolytic Refining and Smelting Co. of Australia 
Ltd. at Port Kembla (smelting concentrate from Cobar 
and Wo od lawn Mines ) 

Refineries: 

Mount Isa Mines Ltd. at Townsville 

Electrolytic Refining and Smelting Co. of Australia 
Ltd. using blister produced from Cobar ore 



Quantity 



158,732 

3,302 

6,593 

19,835 

11,974 

148,260 
6,393 



18,754 

132,091 

12,737 



27 



o 

00 
ON 



«0 

S-i 
4-1 
CO 

3 



CO 
<D 

c 

00 

g 

•H 

o 

•O 
o 

M 
(X 

I 

M 


cx 
a 
o 
o 

00 

g 

•H 
•0 


a> 



00 

w 









4-1 CO 43 




CU 


G 












CO 43 CJ 




T> Pi 


•H 


1 


1 ••> 








4J tH rH 




S 1 


CU 


CJ 


rH 4J 








•0 43 «0 




43 -0 


d 


CO «H 


CO 






CU O !* G 




o 


4-1 CU 


•0 


•H CD *0 


4-1 






O 4J pi 




cu £ 


4J 


o 


4J OH 


d 






a * d 




o- cu o 


Pi u 


M 


d cu o 









"0 "O >s 




M 4JH 


•H CO 


Cu 


CU CU 00 


Cu 43 






O CU h 


• 


CU CO 


44 




CO TJ 1 


•H 4J 






M rH 


>s 


rH U-l 


00 CO 


cu • 


CO u 


CJ 


4-1 




Cu tH O 


4-1 


CO O 


d 


4-» T3 


CU M CU 


•H M-4 


d 




iH 4J 


•H 


Pi CU 


•H ►* 


CO CU 


CU Cu 


4J O 


cu 




CO IH M-l 1 


u 


O 43 CU 


d -o 


M 4-> 


CO Cu Cu 


u 






•H CU O 


CO 


•H 4J CO 


■JJB 


4-1 l-l 


HftO 


CO 


g 




•0 P O 


Cu 


4-» P) 


d o 


O CJ 


Cu^. . 


O 




)H O 


CO 


CO Pi CO 




cu a 


cu u 


i—i cu 


co 




CU CO CU * 


CJ 


U «H CJ 


cu cu 


cj X 


d i to 


CU 4-> 






Cu iH O 




CU CU 


rH U 


d cu 


•H -0 

B rH CO • 


43 






p, oj h m 


00 


Cu 43 • 


CO O 


o 


4-» 4«S >-i 






O C rl H 


Pi 


O CO CU 


CJ 


O CO 


O -H 4J 


4-1 






co to 


•H 


CO CO > 


CO • 


•H 


O 00 -H 


M-l 4-> d 






c 


00 CU - M 


1 < • 


M 


bO o co 


O 






cu b 


•H 


COOS) 


cu • m 


cu d 


CO cO 4«{ O 


rH 






•O (i co 


<4-l 


•H 00 CO 


bOCO vD 


Cu O 


Vj CJ Cu 


Xi rH d 






O 43 O co 


CU 


Pi O ON cu 


M • ON 


Cu-H 


U >, CU CU 
rH CO -0 

12 


OHO 






5 "** 


U 


g W ^M 


.J 


O 4-» 
CO 


£ O 

w 










M 




bO 


• 


. cu 






>\ •> 




• 


o 


d » 


*0 


4-1 00 






U CO 




•0 


• 4-> 


•H • 


4-» 


O CO -0 






CO CO 00 




4J 


*o d 


d o 


rJ 


4J O 






CU «H Pi 




iJlWO 


4J<H -H • 


•H CO 




d *P 


a 




Pi TJ -H 




O pi 


kJ O 4-1 CO 


s 


•0 


•H 


•H 




•rj iH *0 
33 CO rH 




(3 CU 


O -H 


!* 


d 


44 h n 


43 






CO >>, CO 


co >» h rH 

CU M M CO 


iH CO 


cu 


O rH Cu 


CO 




•° 5 




bO J-i rH 


rH ^ 


CO 


•H rH 
« >H 


M 




to s w 




U tO rH 


d to u 


CU iH 


rH 


CU 




CO CO 




O iH 


•H «H CJ 4J 

S tj d co 


i^-H 


rH 


4J 43 






H S 




5fi -0 Ds 


^^ 





O II) PU 


5 




•> M 




•H 1 


•H -H PJ 


& 


d d 


<5 




4J • S • 




4-1 CO O • 


U CO CO <n 


4J • 


1 


^4 < « O, 






G T3 "0 




pi 43 4*5 *0 


CO 43 d 


COT) 


o 


N M 






4J M-l 4-1 




G d 4J 


43 d O M-l 


d d 4J 


4*5 


M-l o o 






O hJ O iJ 




O CO Pu hJ 


O CO CO o 


O (Sri 





o oou 






2 




S3 


CO 


a 


PM 


CO 


0) ». 


CO 
















4-1 


G 








x-s 


/~s 


^v 


<»"N 


CO O 


o 


O /~v 




O ""N 


o d 


o d 


r-* d 


o d 


H «H 


4-> 


O Pi 




o pi 


o co 


o co 


CM CO 


o co 


O 4J 4J 




o o 




o co 


o 


o 


m 


o 


00 d 


CJ 


A 




A 


•>*$ 


•>&* 


•>B^ 


•>&« 


» 0) 3 


•H 


O B^S 




vO B>8 


»* r-* 


NO VO 


oo m 


in m 


^ cj -o 


>-l 


co m 




CO ON 


Cst CM 


r» cm 


«* CM 


CO CM 


d o 


4-> 


vO CM 




V- / 


•>~s 


■>^ 


N_X 


•*~s 


O «H 


<U 


v^ 














o a. 


e 


































X 




4-1 




















* c 










*i 




A 


** *N ^ 4_J 




cu cu 




G 




=1 


d d 


d 


d -h 


3 C-flN. 




•0 CJ 




CO 




co 


CO N 


CO 


CO « 


CO N PU 00 




CO t-4 


















CO 


M CU 




r-4 




vO 


o >* 


m 


O cvj 


m st cm o 


0) 


O cu 




• 




• 


• • 


• 


• • 


• • • • 


> 






CO 




o 


f-4 <t 


<—l 


CO o 


t-l 00 CO rH 


i-i 


















in 


cu 

CO 






































A 


>> G 

4J O 

•H -H 


CO 






CO 

• 












4J rH 


C 


o 






o 


o 


oo 


o 




G rH 


o 


oo 






CO 


CO 




I— 1 




CO «H 


4J 


I— I 
















3 




















O" 






















• 




• 


• 


• 










• 




-0 


• 


• 


• d 








• 




d 


• 


• 


CO u 








• 




tO 


CO 


• 


CU 




d 




-0 




rH 


cu 


tO 


d Xi 




o 




Pi 




CO 


iH 


•H 


tit: 




•H 




CO 




Pi 


J5 


d 


43 


4-) 




rH 




CU 


ts 


cO 


o 


4-1 


CO 




CO 




cu 







O 53 


d 


O 




Pi 




& 


43 


CO 


4*i 


o 


O 




CU 




4-1 


cO 


o •> 


CO 


iH 




CU 






d 


H 


CU M 

O cu 
cu 




T3 




£ 




#1 

c 


o 


A 


B 


d 








CO 




iH 


•0 U • 


53 


CO 




«k 




00 


> 


rH 


d co >> 








tO 




M 


«a> 


cu 


(-1 


M 


CU 




CO 




O 


53 


>% 


4-1 O 


rt 


d 




H 




a 




h4 


o d 4-» 


3 • 


•H 










A 




CO (D rl 


CO 


g 




4-1 




4J 


p 


4-1 


d u 


rH CU 






Pi 




Pi 


tO 


d 


m d n 


*0 rH 






pi 




PI 


43 


d 


(-1 cu cu 


O 






o 




o 


o 


o 


H H 


O !3 








a 




g 


CO 


s 


& 


& 



28 



Analysis of Pertinent Factors 

The Mount Isa Mine accounts for about 
70% of Australia's mine output of copper. 
This important segment of the industry is 
fully integrated through production of 
electrolytic refined copper. Only about 
20% of the Australian copper ore produc- 
tion is not processed to the blister 
stage but is exported as concentrate. 
This share of the ore production comes 
from a number of mines, and production 
from each operation is not sufficiently 
large to justify establishment of a 
smelter-refinery complex. While the cur- 
rent pattern of ore production would not 
make the establishment of additional 
smelters cost effective, the development 
of the Roxby Downs deposit would alter 
the picture. The reserves of this mine 
and the envisaged scale of production 
would justify an integrated operation. 

Any large investment in a new copper 
mine-smelter complex, as for Roxby Downs, 
must necessarily take into account antic- 
ipated increases in world demand and 
increase in capacity resulting from proj- 
ects already initiated. The Bureau's 
forecast of U.S. and rest-of -world demand 
for primary copper for 1990 is 12.4 mil- 
lion metric tons, compared with about 
8 million tons of smelter production 
expected in 1980. This would leave a gap 
of 4.4 million tons. However, there is 
evidence of a certain hesitation by com- 
panies to initiate new projects. For 
example, Exxon Minerals Chile, Inc., has 
temporarily delayed the full expansion of 
the Disputada Mine in Chile, and progress 
on development of the Colorado deposit in 
Panama has been slow. The forecast may 
be on the high side, and an annual growth 
rate of 1% or 2% in the next decade may 
be more realistic. Based on a world 
demand of 8.1 million tons of primary 
copper in 1978 and a 2% annual growth 
rate, demand in 1990 would be about 
10.3 million tons. With this forecast 
the gap would be 2.3 million tons. 
Based on information presented in 
January 1982, D copper projects under 

'^Work cited in footnote 3. 



construction or for which development 
programs have been prepared may add about 
1.3 to 1.5 million tons of copper capac- 
ity. Based on a 2% rate of growth in 
demand, the additional capacity under 
construction and planned does not seem 
excessive, and the demand gap could be 
filled by ongoing projects including 
Roxby Downs, other factors being equal. 

IRON ORE 

Commodity Profile 

In 1980 Australia was the world's lead- 
ing iron ore exporter, and in 1981 it 
followed Brazil as an exporter. Austra- 
lia ranks third after the Soviet Union 
and Brazil in production. In 1980, Aus- 
tralia accounted for 11% of world mine 
production and 23% of world trade of iron 
ore. Of 95.5 million tons of ore produc- 
tion in 1980, Western Australia accounted 
for about 90 million tons (95% of total 
production) . Principal iron ore produc- 
ers and their respective production in 
1980 and some pertinent information are 
given in table 9. Three companies oper- 
ating four mines in Northwestern Austra- 
lia are the principal producers. The 
Bureau of Mineral Resources of Austra- 
lia^ 6 assesses ore reserves to be 18 bil- 
lion tons (revised to 22 billion tons) of 
readily usable low-phosphorus ore with 
another 17 billion tons of high- 
phosphorus ores in the identified para- 
marginal resources category. 

In 1938, a ban was imposed on the ex- 
port of iron ore because reserves, at 
about 250 million tons, were considered 
inadequate for domestic requirements. 
However, exploration in the early 1960 's 
established the Hamersley region of 
Western Australia as a major iron ore 
province. Starting in 1966, production 
increased substantially. Prior to this 
year, iron ore for the domestic steel 
industry was mined in the Middleback 
Ranges in South Australia. 



"^Work cited in footnote 3. 



29 



o 

00 
OS 



I 



DO 

c 

iH 
U 
3 

■O 
O 
M 

a 

I 

eu 

M 
O 
I 

c 
o 
u 



DO 



•H 

•a 

« 

0) 



4-> 

to o 

•H In 

P IM 



O 
4) 

u B 
M a. 
O iH 

a- x: 
to 



I 

cj 

ai s 
4J -o 

co o 

O ri 



4) 4-1 

rH CJ 

X 3 

en -a 

^H O 

cd U 

CO o. 



ai 

In 
o 



4J CO 

co a 

u e 

<o o 

Cm CJ 

o 





o c 

■H O 
O 4J iH 
00 UH 
OS fl i-l 

p 
a 



5*. 

4J O 

-h iH so 
u i-h o 

UH O 
O. i-l 4J 

s a 









*^N 






^-^ 


























rH 






iH 






















co 


r^ -H 






O i-l 










O O 


a- 


CO o o 








Os 


cm rt 






r~ cO 












cc 


rH 00 00 








CM 




















<t 


^A 1-* ^-t 








• 






. 


























• 






• 


























• 






• 










Cfl T3 




• • • 












•o 






4-> 










rH C3 




•o • • 












c 






4-1 










co co 




13 • • 












CO 






O 










H rH 




cfl . • 












r-l 






CJ 










CO 




i-H • • 












•o 






i-l 










O l-H 




*r) • • 








In 


£ 






CO 










o 


<c 


4) O O 








41 






S 










4J G 


c 


53 T3 T) 








•H 


















cfl CO 


(C 


• • 








a. 


4J 






4J 










M rH 


P 


4J • • 








e 


M 






H 










CJ O 


•T- 


rl • • 








cd 


O 






o 










o q 


s 


o • • 








O 


tu 






Pi 










CJ W 


u. 


Oh . . 








SO 


OS 






CM 










<~i m 


r- 


sO CO CO 








SO 


sO 






r^ 










in so 


sC 


VON N 








OS 


OS 






os 










OS OS 


o- 


OS OS OS 








<-H 


rH 






•-* 










rH .— » 


*" 


—H rH i— 1 










V 




CO 


CO 








s-e 












B^S 








<D CM 


4) 








r- 








B^S 




-CO 








K* C ~ CO • 


N C • 






<r> #. 


in 








CO 




B^ sO 








m iH 4) 4J 4> 


in i-i tu 






CO 4) 










1 sO 




in 








sO »4H fa CD Ph 


SO <4H Ph 






4-1 Pu 


CO 








<4H 




SO CO 








iH 








41 


41 








O 4) 




4) 








ft «N H X 


P. «B-« 






i-l B«S 


e 


• 






1 G 


• O. C3 








<U CM CD CO 


4) CM 






iH CO 


•t-i 


4) 






B^ 


4 


iH 41 








^ Ph \C Cm sO 


3 hsO 






01 sO 


sw 


fn 






fx 


3 <4H Fn 








hJ 


.J 






Pi 










Pi 




►J 






0) 


4) 






41 










4) 




41 








4-1 


4-1 






4-> 










4J 




4-1 








■H 


•H 






•H 










•H 




iH 








4J 


4J 






(3 










4-1 




4-1 








CO 




§ 






O 












Cfl 

S 




S 








0) 


41 






t4 










4) 




4) 








ss 


S3 






►J 










D3 




03 






1 


B-S 






CO 


1 






I 






„ 








co co 


m •« 


• 


• 


i-l •» 


a. 






iH 






CO 


■ 




<: 


3 M 


CN 6-S 


• 


6-« 


iH B^S 


o 


■ A 




U 






"O 


B-! 




H 


<; .« a) 


o 


•o 


O 


CO O 


rH 


6-S 


■ A 


o 


* 




rH 


o 


<d 


i~*3 


• -s-s -c 


«co C 


4-1 


co 


l-i en 


41 


O 


B-S 


CO 


• 




4) • 


CM 


M 


<C 


IH N N H 


• o 


►J 




4J 


> 


CO 


m 


CO 


>» 




•rl O 




hJ 


3S 


O CO • o 


o. •> u 




•» 


CO « 


41 




CO 


<! 


4-1 




MH U 


». 


<E 


H 


• so js 


U • M ••> 


4) 


• 


3 • 


a 


A 






Pu • 




tJ 


• 


o2 


CO 


O CM 4) 


O •« B>S 


M 


-0 


<! >» 




• 


« 


(3 


^s 




rH 4-> 


T3 


H 


B 


4-1 00 « In 


O 4-» J3 O 


O 


4-1 


4J 


CU 


"O 


• 


O 


r-f O 




O C 


4-1 


CO 


< 


eg co 
•H •> .0 


►J O rH 




►J 


C Pm 


u 


4J 


•rj 


h 


rH O 




O 4) 


^J 


p 




01 4J 


C 




M 


o 


hJ 


4J 


H 


•H rH 









< 


^ 


4J • M CO 


U CO M « 


o 


C3 


01 « 






rJ 




P3 




t) O. 


co 




x 


O Tj iH 


O rH • 


u 


O • 


4J • 


c 


* 




M 






41 O 


bO 


n 


w 


1-j 4-1 M-l 
« tJ CO 


CO T3 


H 


u s-s 


CO O 


o 


• 


M 


01 . 


G * 




4J rH 


C 


H 


C M • 4J 




I-l o 


01 CJ 


u 


>^ 


11 


J3 B« 


41 "3 




cfl .« 4) •« 


•H 


p 


CO 


4) i-l 


O 4) O .J 


4-1 


CO 


S 


I-l 


4J 


> 


"A 


# 4J 




MX >>« 


"C3 


o 


W 


CJ CO U) rH • 


M C 1 


CO 


CO 


00 




Pu 


•H 


CO 


O J 




iH CO 4) CO 


i-H 


CO 


3 


i-l 4) CO B-S 


I-l iH iH - 
2 3 • 


3 


u •> 


CO c 


•H 




Prf 


rJ •> 


u 




rH -^ Q ^ 


O 






i-l iH m in 


M 


CO • 


M-l i-l 


3 


4J 




CO 


PQ « 




O CM -H 


X 






N CO CO 4J • 


X CO >> 


4J .. 


,£> T3 


SH C 


CO 


C 


41 


41 4) 


• 




CO £i 








(3 U O. CO rH 


CO Oh 4J 4J 


r-i s-e 


i-l 4J 


■H i-l 


4-1 


4) 


X 


O- 4J 


41 O 




G sO CO co 


s 






O 4J Cfl 3 rH 


ISil* 


4) m 

CO 




3* 


£ 





O 

erf 


CO (0 


£" 




O -* 4J CO 


hH 
2 






c 








, 








CO 




. 










co • • 






4) C3 


CO 








rH 




>s-d 








• 


O T3 






rfO O 


4> 








CO 




X 4J 








>s >> 


S O 4J 






P u 


4J 








rl 




4J rJ 








0) 4-1 


4) J 






Ui M 


CO 








41 




rl 








i-H Pk 


Z DO 








•H 








C 




O DO 








CO 


c « 






CO U 


CJ 








3 • 




3 C 








u a 


U Tl • 






in 4) 


O 










CO iH 








4) o 


C (3 {►. 






m > 


CO 








TJ 




T3 C 








S M 


3 t4 4-1 






•H i-l 


CO 








Ph 4J 




"3S 








CO M 


oSft. 






rH P!l 


< 








S3 ,J 










03 


s 






u 










pa 




o 








-* 


00 






-^ 










o 




Os 








• 








• 










• 












OS 


r» 






m 










•* 




in 








CO 


CM 






rH 














t ^ 










• 

1 U 












• 






















a a 


• 










CO 






















iH CO O 


1 CO O 






1 CO 




4-1 






















oi u 


g 41 a 






C V 




11 






















«T3 


•H "O O 






■H -O 




iH 




















O O 3 O 


3 CJ 






3 


o 


rH 




















. . i-l • 


•> r-4. 






«rH 


• 


4) 






O UO 


C 


o so m 








-h m cj so 


O O in 






o o 


in 


a. 






• • 




i • • • 








CO — ( 


-* 






CN 










rH CM 


c 


1 CM •* rH 






• • 


, 
















• • 




' >» • • 








• • 


• 
















• • 




XI • . 








41 • 


M 
















•a • 




. 4J • • 








CJ • 


o 
















c • 




> u • • 








•H • 


CO 
















CO "0 


b 


o • • 








M • 


JQ 
















i-H G 


c 


» • i-H 








Pm • 


4) 
H 






cfl 











CO Cfl 

H rH 


i- 
X 


CO • iH 

•a • in 

Hj- S3 








S o' 


CO 






•H 










CO 


X 








O T> 


i 






d 
p 










O I-l 

o 


c 


o a 

C5 Cfl 4) 








3 








3 










4J 13 


n 


O CO 








4-1 ,o 


4J 






CO 










cfl cfl 


p 


% 4J iH 








CO 


fl 






a 










J<! rH 


i— 


c >» u 








3 U 


3 






a 










O O 


c 


) 3 cfl a 








O CO 









CO 










o o 


c 


1 OX! 3 








s 


: p- 


S3 






Px 










O !*i 


M 


z 


CO CO 







B>« I B~S 

CO rH -* 
I SO 01 SO 



3* 



4) 4) 4) 
Ph rH to 



C • • 
4) >,•« 

^i 4-1 4-1 

O P- i-J 
In 
PP. rH « 



S S 



in 

CM 



O 
co 



X 


I 

u 

cfl 

C3 



CO 4) O 

pa o s 


iH 
OHO 
M PL, M 



CO 4) 

4-1 pH 

41 

rH B-? 

rH r~ 

41 sO 
Ph 




O 

IH •- 

H B-S 

O 

4J m 

CO 

Olin 
3 - 41 

A ' > 

4J T) 

M 4-» 2 

O hJ 52 

2 co 



4> 
CO 

4) 



cfl • 
O.BM! 
cfl O 
>-) in 



4) /-v 
M CO 

3 CU 



41 CO 
bO 41 
Cfl 
> iH 

cfl S 

CO 



11 

CJ 








IH 








3 








o 








CO 








u 








oi 








i-H 








CO 






t 


>H 









01 






o 


c 






•H 


2 






4-1 
CD 

3 


m 






Cfl 


• 






X 


CO 






X 


•H 






4) 


T-i 








cfl 






4) 


>J 






> 


4-1 






M 


CO 






4) 


3 






CO • 


< 






4) CO 

In CU 

•H 


• 






«-l 


CO 






O cfl 


0) 






9- 


o 






41 


M 






CO o 


3 






3 U 


O 






cfl 


CO 






CJ 


& 








X) 


• 




►> cfl 


C 


O 




i-H In 


rt 


00 




4-1 4-1 




as 


• 


CO 


D 


^H 


O 


01 3 


T3 




00 


M <! 


cfl 


S>sOs 


Cfl 


M 


IH 


-H 


O.T3 


H 


CO 




a o 




3 


rH 


CO cfl 


UH 


lu 


•rl 







X 


rl 


rH 11 




11 


Cm 00 CO 


4J 


fa 


< OS 4) 









"-< 


1> 


TJ 


■o 


cfl 





1) 


1) 


a 


4J 


Cfl 


CD 


•rl Cfl 


M 


O 


i-H 


>-> 


CO 


rH 


O 


•o 


a 


CJ 


CJ 


01 « 


0) 






CO CO 


a 


4J 


4-1 


O 4) 




C 





r-i 4-1 


C 


Cfl 


(0 


O CO 


Cfl 


i-H 


r-( 


4J 


iH 


a. 


Cu 


Ou CO 


rH 






Cfl 


W 


4-1 


4-1 


O T3 


w 


0) 


01 


4) 


4-1 


rH 


rH 


>% 4-1 


cn 


rH 


rH 


Cfl -H 


1 


Cm 


U 

Ph 


X 
CO P 


H CM 


r> 


r m 



30 



Analysis of Pertinent Factors 

Australia's vast iron ore and coal 
resources occur a continent apart; i.e., 
the iron is in the northwestern corner of 
Western Australia, and the coal is in the 
southeastern area of New South Wales very 
close to the eastern shore. The iron and 
steel plants, with the exception of 
Kwinana and Wundowie in Western Austra- 
lia, are also located on the southeastern 
coast at Newcastle and Port Kembla in New 
South Wales and at Whyalla in South Aus- 
tralia. This geographical situation 
would be an inhibiting factor in any plan 
to take advantage of the two resources 
and make Australia an important world 
steel producer for the export market. 
Iron ore for most of Australia's steel 
production is obtained from Mount Newman 
in Western Australia. 

Another factor is the current world 
iron and steel situation (excess capac- 
ity) and the anticipated trend in demand 
growth. For the world, other than the 
United States , demand for iron and steel 
in 1990 is estimated at 835 million tons, 
indicating a 2.85% average annual growth 
rate. For the United States (a mature 
economy), the growth rate in demand is 
more modest — about 1.4% — and the probable 
1990 demand is estimated at approximately 
145 million tons. Compared with total 
world demand in 1990 of 980 million 
tons, the 1980 production and capacity 
were 708 million and 955 million tons, 
respectively. With these estimates, thp 
gap to be filled by 1990 would be 25 mil- 
lion tons. For the year 2000 probable 
world demand would be about 1,225 million 
tons, leaving a gap of 270 million tons. 

In the next decade or so, new steel 
plants will be built in such emerging 
industralized countries as Mexico, Bra- 
zil, and the Republic of Korea and in 
countries with abundant energy sources 
such as Venezuela, Algeria, and some of 
the Persian Gulf countries. The Tubarao 



steel plant in Brazil is planned for 
3 million tons. Between 1981 and 1990 
steelmaking capacity in China, India, the 
Republic of Korea, Taiwan, Indonesia, and 
Malaysia may increase by about 37 million 
tons (China 22, India 9, Korea 3, Malay- 
sia 1, Indonesia 1, and Taiwan 1). These 
countries enjoy the advantage of low 
labor cost; in addition, China and India 
have good raw materials, and Indonesia 
and F^laysia have abundant natural gas. 
Taiwan's and Korea's competitive advan- 
tages lie in low cost and efficient labor 
and managerial skill. Much of the cur- 
rent installed capacity is in the United 
States, Western Europe, Japan, Canada, 
and Eastern Europe. For the free market 
economies , one may assume that the 
investment is substantially amortized and 
that in spite of current difficulties, 
there will not be a substantial capacity 
reduction. Capacity reduction in the EC 
is part of a rationalization effort to 
make the industry more competitive. Also 
plant modernization and/or expansion 
would be less expensive than building a 
greenfield site plant. 

In establishing a steel plant, the 
existence of a domestic market is con- 
sidered a more favorable factor than a 
drive for export, which often proves 
unreliable. This would suggest that the 
expansion of the steel capacity in Aus- 
tralia would be related to the domestic 
demand. The Australian crude steel 
capacity was 9.4 million tons in 1980 and 
fell to 9.1 million tons in 1981. Broken 
Hill Proprietary forecasts a 3.3% in- 
crease in Australian steel demand to 
1985. Assuming this rate of growth and a 
current demand of about 7.5 million tons 
in 1980, the demand in 1990 would be 
about 10.4 million tons, which is about 
1 million tons above the existing capac- 
ity. It would seem, therefore, that in 
the short term, Australia would have a 
domestic market for an additional 1 mil- 
lion tons of steel capacity. 



31 



LEAD, ZINC, AND SILVER 

Commodity Profile 

Metal mining in Australia started with 
lead-zinc-silver ores. Since 1841, when 
lead-silver ores were first mined in Aus- 
tralia, the industry has been an impor- 
tant segment of Australian metal mining. 
In 1980, Australia was the third 
largest world mine producer of lead and 
zinc and fourth in silver. Its share of 
world mine output for these metals in 
1980 was 11.5% for lead and about 9% each 
for silver and zinc. 

The bulk of the lead ore and much of 
the zinc production are processed to con- 
centrates and metals. The world's larg- 
est smelter of lead ore is at Port Pirie, 
South Australia. Risdon in Tasmania is 
one of the world's three largest zinc 
refineries, excluding any in the Soviet 
Union. Australians consume only a small 
share of the production — 68,200 tons in 
1980 for lead, of which 49% was from 
secondary sources, and 100,450 tons in 
1980 for zinc. Thus, Australia is a 
large world supplier for these metals. 
The principal destination for lead bul- 
lion, for which Australia is the world's 
largest exporter, is the United Kingdom. 



Refined lead and zinc are exported 
principally to a number of Asian coun- 
tries, as well as New Zealand, the United 
Kingdom, and the United States. Whereas 
lead exported as a concentrate is rela- 
tively small (58,450 tons with lead con- 
tent of 12,850 tons in 1980), Australia 
exports a substantial share of its mine 
production of zinc as concentrate 
(524,270 tons in 1980 with a zinc con- 
tent of 260,970 tons), with Japan as 
the largest market (309,370 tons in 
1980). 

Mount Isa in Queensland, Broken Hill 
and Woodlawn in New South Wales, and 
Read-Rosebery in Tasmania are the 
Principal producing lead-zinc mines in 
Australia (table 10). Mount Isa and 
Broken Hill acount for 90% of Australian 
mine lead and about 70% of mine zinc 
production. 

With the exception of Victoria, all 
Australian States and the Northern Ter- 
ritory have lead-zinc mines in develop- 
ment or promising deposits. Besides the 
Mount Isa Mine in Queensland, there 
are three other producing mines as 
follows : 



Aberfoyle, Que River, 
Tasmania. 



Teutonic Bore, West- 
ern Australia. 

Elura, New South 
Wales . 



To treat annually 150,000 to 200,000 tons 
of high-grade, lead-silver-zinc ore per 
year. Reserves 3 million tons. 

Anticipated to treat 300,000 tons of 
zinc-copper ore annually. 

Ultimate capacity to treat 1.1 million 
tons of zinc-lead ore annually. 



Production 
start 

1981 



1981 



1982 



Sorby Hills in Western Australia is an 
attractive deposit that may be ultimately 
developed into a producing mine. 
The Sorby Hills deposit reportedly has 
14 million tons of ore reserves contain- 
ing 5.4% lead, 0.6% zinc, and 60 grams of 
silver per ton. In addition, Mount Isa 
is boosting ore production by 20%, to be 
achieved in 1982-83. 

Broken Hill Associated Smelters Pty., 
Ltd. (BHAS), at Port Pirie, South Austra- 
lia, with a production capacity of 



230,000 tons per year, is the sole pro- 
ducer of refined lead. The Mount Isa 
smelter, located at the mine, smelts most 
of the mine concentrate to bullion. 
Primary refined zinc is produced in three 
plants: Risdon of the EZ Industries Ltd. 
in Tasmania with a rated annual capacity 
of 210,000 tons, Cockle Creek of Sulphide 
Corporation Ltd. with a rated capacity of 
75,000 tons of zinc in New South Wales, 
and Port Pirie, South Australia, which 
has an electrolytic zinc refinery with a 
rated capacity of 45,000 tons per year. 



32 



TABLE 10. - Lead-zinc mines in Australia 



Mine and location 



1980 mine 

production, 

tons of metal 

content 



Ownership 



Comments 



Mount Isa, Queensland 

Lead 

Zinc 

Silver 



Broken Hill, New South Wales 
North Broken Hill: 

Lead 

Zinc 

Silver 

Broken Hill A: 

Lead 

Zinc 

Silver 

Broken Hill B: 

Lead 

Zinc 

Silver 

Total 2 : 

Lead 

Zinc 

Silver 

Woodlawn, New South Wales: 

Lead 

Zinc 

Silver 



Cobar, New South Wales: 

Lead , 

Zinc , 

Read/Rosebery, Tasmania: 

Lead , 

Silver , 

Zinc , 



141,300 

113,000 

403 



50,150 

40,600 

85 

75,800 

75,750 

66 

71,850 

124,400 

60 

209,600 

250,350 

242 

27,400 

65,700 

54 



3,600 
11,300 



15,500 

53 

57,270 



) Mount Isa Mines 
Ltd. , a subsid- 
ary of M.I.M 
Holding Ltd. 



North Broken Hill 
Ltd. 



Zinc Corp. Ltd. 1 



New Broken Hill 
Consolidated 
Ltd. 1 



A consortium of 
Conzinc Riotinto 
of Australia, 
St. Joe Minerals 
Corp. , and 

- Phelps Dodge. 



Cobar Mines Pty., 
Ltd. 



E. Z. Industries 
Ltd. 



Lead concentrate is smelted 
at mine to bullion, which is 
sent to Townsville by rail 
and then exported to the 
Brittania Lead Company Ltd. 
(an M.I.M. subsidiary) for 
refining. 

Zinc concentrates are railed 
to Townsville for export and 
occasionally to the Risdon 
refinery of E. Z. Industries 
Ltd. in Tasmania. 



Lead concentrates from the 
three Broken Hill mines are 
shipped principally to the 
lead smelter-refinery at 
Port Pirie, South Australia, 
and some to Cockle Creek 
smelter. Zinc concentrates 
are shipped to the zinc re- 
finery at Risdon. 



1 Owned by Australian Mining and 

2 Includes production by Minerals 



Woodlawn was inaugurated in 
December 1978. When oper- 
ating at capacity, the mill 
will produce 120,000 tons of 
zinc concentrate, 40,000 
tons of lead concentrate, 
and 35,000 tons of copper 
concentrate annually. The 
concentrates will be mostly 
exported by participating 
companies . 

Concentrates shipped to 
Cockle Creek and some lead 
concentrates exported. 

All lead and copper-lead con- 
centrates exported. Zinc 
concentrates probably 
shipped to the Risdon 
refinery. 



Smelting Ltd. 
Mining and Metallurgy Ltd. of Adelaide, South Australia. 



33 



BHAS accounts for three quarters of 
Australian refined silver production, as 
a byproduct of the company's lead smelt- 
ing and refining operations. The Elec- 
trolytic Refining and Smelting Co. of 
Australia Ltd. is the other major silver 
producer, recovering the metal from cop- 
per concentrates from Mount Lyell, Cobar, 
and other sources treated at the Port 
Kembla refinery in New South Wales. Sil- 
ver is also recovered as a byproduct of 
zinc refining at Risdon. The Perth Mint 
produces silver from gold buillion from 
Western Australian mines and buillion 
scrap of overseas origin. Silver is also 
refined, mainly from scrap material, by 
Johnson Matthey Pty., Ltd., in Sydney, 
Englehard Industries Pty., Ltd., in Mel- 
bourne, and Harringtons Pty., Ltd., in 
Sydney . 

Analysis of Pertinent Factors 

The Australian Bureau of Mineral Re- 
sources projects growth in lead produc- 
tion, in metal content of ore, to 
525,000 tons in 1990 and 600,000 tons in 
2000. The corresponding figures for 
zinc are 650,000 and 735,000 tons 
respectively. The forecast for lead 
would involve the growth of lead-smelting 
capacity by about 100,000 tons and con- 
siderably more for zinc refining, e.g., 
about 325,000 tons. In considering such 
an expansion, two factors need to be 
examined: (1) anticipated world demand 
by 1990 and (2) competition from other 
producers that have low labor cost and/or 
enjoy the Generalized Scheme of Prefer- 
ences (GSP). The Bureau of Mines fore- 
cast of probable world demand for primary 
lead in 1990 is 4.4 million tons, almost 
1 million tons more than the maximum 
production of 3.4 million tons during the 
1970-80 decade. Actually, during this 
decade, world smelter production ranged 
from 2.9 million tons to 3.5 million 
tons, with the variance attributed to the 
cyclical nature of the industry. A con- 
sistent growth trend in production is not 
discerned. In view of this, it is quite 
likely that the probable 1990 demand is 
high. Assuming a world primary demand of 
3.2 million tons in 1978, the demand in 
1990 with a 1% growth rate would be 



3.6 million tons compared with primary 
smelter capacity of about 4.1 million 
tons in 1974. Clearly some of this 
capacity would require replacement 
because of either antiquated technology 
or environmental restraints. Assuming 
that 10% of the present capacity would 
need to be replaced, the world lead de- 
mand for 1990 would necessitate additions 
of 400,000 tons of capacity. Since only 
a few small primary lead smelters are 
being built, Australia may well have a 
significant share of the anticipated 
addition. Australia, with its excellent 
resources of high-grade lead with by- 
product values, with its facilities 
reasonably well located in terms of 
vicinity to ports, and with considerable 
experience in the industry, is favorably 
situated to expand mine and smelter 
production. 

Japan and Belgium have been the major 
importers of Australian lead concentrate 
in recent years, and the United Kingdom, 
the Netherlands, and the Federal Republic 
of Germany are Australia's largest 
customers for lead bullion. The United 
Kingdom, the United States, and India are 
the major importers of Australian lead. 
In the European Communities market, Aus- 
tralia will compete with Canada for sales 
of lead metal. Since neither country 
enjoys GSP tariff advantages, other 
things being equal, Australia should not 
have difficulty in maintaining its share 
of the EC market. For markets in India 
and South Asia, Australia has a geo- 
graphic advantage. Since developing 
countries, by and large, are not lead 
producers, Australia would not be at a 
competitive disadvantage because of the 
low labor costs and GSP advantages these 
countries would have. 

Australia's competitive situation in 
expanding mine output of zinc smelting 
and refining facilities may not be as 
favorable as for lead. Probable 1990 
world demand for primary zinc is esti- 
mated by the Bureau of Mines at 8.1 mil- 
lion tons, compared with 1978 primary 
metal production capacity of 7.7 million 
tons. There have been significant addi- 
tions to zinc smelting and refining 



34 



capacity. In Peru, the Cajamarquilla 
refinery with 100,000 tons of refined 
zinc capacity started operation in 1981. 
In Mexico the San Luis Potosi zinc re- 
finery has been completed with an annual 
capacity of 113,000 tons of refined zinc. 
Industrial Minera Mexico plans to 
increase mine production by 33,000 tons 
of zinc per year by 1983. Arvik 
Mines Ltd. in Canada plans to produce 
100,000 tons per year of zinc from the 
Polaris Mine. The Energoinvest and 
Trepca Mines in Yugoslavia expanded pro- 
duction of lead and zinc ore during 
1978-79. Thailand plans to produce about 
60,000 tons of zinc in concentrates and 
to smelt it within the country. 
Offsetting these additions have been clo- 
sures of some smelters because of envi- 
ronmental restraints, antiquated technol- 
ogy, high energy and labor costs, and low 
metal prices. Nonetheless, the antici- 
pated slower growth in consumption of 
about 2% for primary zinc may not provide 
the market for the planned expansion in 
Australian zinc production. 

Australia's markets for zinc concen- 
trate are Japan, the Netherlands, and the 
United Kingdom. Of these, Japan is the 
largest. Should there be a shift in 
Japan's imports from zinc concentrates to 
zinc metal because of environmental 
restraints, the market outlook for Aus- 
tralian zinc would improve. This is not 
anticipated in the short run to 1985 
because Japan, presumably to assure sup- 
ply of zinc concentrates, is partici*- 
pating in the development of lead-zinc 
mines in Canada and Peru and in the 
exploration of some deposits in the 
United States. Also, Australia competes 
with Canada and Peru in the Japanese mar- 
ket for zinc concentrate sale and to some 
extent with Mexico in the Netherlands. 
Australia may have a tariff disadvantage 
vis-a-vis Peru and Mexico to the extent 
that these countries are eligible for 
preferential access to Japanese and 
European markets. 



MANGANESE 

Commodity Profile 

The Groote Eylandt open pit manganese 
mine, operated by the Groote Eylandt Min- 
ing Co. Pty., Ltd. (GEMCO), a wholly 
owned subsidiary of the Broken Hill 
Proprietary Co., Ltd. (BHP), accounts for 
almost all of Australia's manganese ore 
production. The deposit is located in 
the Northern Territory, on an island in 
the Gulf of Carpentaria. GEMCO produces 
some 2 million tons of manganese ore 
annually. Australian manganese reserves, 
as of December 31, 1980, were estimated 
at 490 million tons of high-grade ore, 
almost all in the Groote Eylandt deposit. 
In addition, subeconomic lower grade 
material in scattered deposits, princi- 
pally in the east Pilbara and Peak Hill 
regions of Western Australia, totals 
400 million tons. But much of the West- 
ern Australian material is manganiferous 
iron. Exports account for 65% of the 
output. Of the 1980 production of 
2,020,000 tons, 1,328,000 (66%) was ex- 
ported. In 1974 Japan was the market for 
47% and the United States and the Repub- 
lic of Korea each for 10% of the ton- 
nage exported. The remainder was 
exported principally to West European 
countries . 

Consumption was about 479,000 tons of 
ore in 1980. The domestic steel industry 
is the principal consumer of manganese, 
as ore and as ferromanganese. Ore is 
shipped to the Bell Bay plant, operated 
by the Tasmanian Electro Metallurgical 
Co., Ltd. (a wholly owned subsidiary of 
BHP) for the production of ferromanganese 
at a level of about 100,000 tons per 
year. In the year ending May 31, 1981, 
the company produced 122,000 tons of fer- 
roalloys (principally ferromanganese) , 
despatched 72,000 tons to its steel 
plants, and exported 48,000 tons. 



35 



Analysis of Pertinent Factors 

BHP established the plant at Bell Bay 
to supply the needs of its steel indus- 
try. But the company completed a major 
expansion at the plant in 1977 and is 
exporting some of its production 
(23,000 tons of ferromanganese in 1980). 
Australia has substantial reserves of 
high-grade ore, and the producing company 
has modern technology for ferromanganese 
production. 17 The plant is located in 
Tasmania, which has good hydropower pro- 
duction, and may be assumed to have low- 
cost power. Apparently the cost of the 
coastal shipping of the ore from the 
deposit to the plant in Tasmania has not 
been so onerous as to make the ferroman- 
ganese uncompetitive in world markets. 
In view of these advantages , the industry 
would like to increase ferromanga- 
nese production and increasingly export 
this commodity instead of manganese 
ore. 

The demand for ferromanganese is re- 
lated to steel production, which will 
have a slow rate of growth in the decade 
to 1990. It seems any substantial 
increase in ferromanganese production and 
export must be at the expense of other 
world producers and suppliers. South 
Africa dominates the trade in ferroman- 
ganese and produces about 17% of world 
production of ferromanganese (blast fur- 
nace and electric furnace) . It has low- 
cost manganese ore (reportedly at a lower 
cost than manganese ore produced else- 
where) , low energy cost, installed 
capacity, and established markets. It 
has shorter distances to the European 
market than Australia. Foreign suppliers 
of the U.S. market are South Africa and 
some European and Western Hemisphere pro- 
ducers. U.S. imports from Australia were 
about 25,000 tons in 1979, 18,000 tons in 
1980, and 5,500 tons in 1981. In view of 
the above factors and the low rate of 
growth in demand, the prospect for Aus- 
tralian ferromanganese displacing tradi- 
tional suppliers is not favorable. How- 
ever, because of high power costs, 
production in Japan and some Western 



T7 



Work cited in footnote 3. 



European countries may decline as hap- 
pened in the United States. Any decline 
in domestic production in Japan would 
benefit Australian producers. Japanese 
imports of ferromanganese and silicoman- 
ganese increased from 2,000 tons in 1976 
to 19,000 tons in 1979 with 1979 imports 
principally from India. Even the higher 
import in 1979 is very small compared 
with an estimated production of about 
670,000 tons in 1980. However, the trend 
for increased imports may continue. 

Expansion of the Korean steel industry 
may also create a market for Australian 
ferromanganese. In 1979, the Republic of 
Korea imported 225,829 tons of manganese 
ore and concentrate, of which 88,059 tons 
was from Australia. In 1979 Korea's 
production of crude steel (excluding 
casting) totaled 5.2 million ton. 18 The 
expansion of Pohang Iron and Steel, re- 
portedly completed in 1981, will increase 
capacity from 5.5 to 8.8 million tons. 
This with the capacity of independent 
producers increases the total capacity to 
11.6 million tons. Korea also plans to 
build another 6-million-ton steel com- 
plex. While this expansion means a large 
market for Australian manganese ore, im- 
ports may continue to be substantially as 
ore because Korea already produces fer- 
romanganese (53,000 tons in 1979). How- 
ever, because of high energy costs, Korea 
may find it advantageous to import part 
of its consumption needs as ferroman- 
ganese instead of ore. 

NICKEL 

Commodity Profile 

Commercial production of nickel ore in 
Australia started in 1967 at Kambalda, 
Western Australia; at the Greenvale Mine, 
Queensland, in 1974; and at the Agnew 
Mine, Western Australia, in 1978. 
Producing mines and the respective 
producers are shown in table 11. In 
1980, the mines in Western Australia 
(sulfide type) accounted for 59% of 

18 Chin, E. The Mineral Industry of the 
Republic of Korea. Minerals Yearbook, 
1980, v. 3, 1982, pp. 597-611. 



36 



total production and the Greenvale Mine 
(lateritic type) for the remainder. Mine 
production (content of ore and concen- 
trate) of nickel was 69,700 tons in 
1979 and 74,300 tons in 1980. In 1980 
Australia ranked as the fourth world 
producer, after Canada, the USSR, and New 
Caledonia. The bulk of Australian mine 
production is exported as metal, matte, 
and oxide sinter. 



the matte is exported, including that 
from the Agnew Mine, and some is refined 
in Kwinana to nickel powder and briquets 
for domestic consumption and export. The 
refinery also produces a mixed nickel- 
cobalt sulfide which is exported. Pro- 
duction from Greenvale is exported as 
nickel oxide sinter, and mixed nickel- 
cobalt sulfide is produced at the Yabulu 
refinery and exported. 



Western Australian ores are smelted in 
the Kalgoorlie smelter to matte. Some of 

TABLE 11. - Leading nickel-producing mines in Australia, 1980 



Mine and location 



Ownership 



Comments 



WESTERN AUSTRALIA 



Kambalda-St. Ives, 55 km 
south of Kalgoorlie. 



Windarra, 250 km north- 
east of Kalgoorlie. 



Nepean, 16 km south of 
Coolgardie. 



Agnew, 300 km northwest 
of Kalgoorlie. 



Spargoville, 65 km south- 
west of Kalgoorlie. 



Western Mining Corp., 
Ltd. (WMC). 



Western Mining Corp. , 
Ltd. (50%), Shell Co. 
of Australia, Ltd. 
(50%). 

Metal Exploration, Ltd., 
and Freeport of Austra- 
lia, Inc. 

Western Selcast, Ltd., 
and MIM Holdings, Ltd. 



Selecast Exploration, 
Ltd. 



Ore treated at mill located at 
mine; concentrate railed partly 
to WMC's smelter in Kalgoorlie 
and partly to the company's re- 
finery at Kwinana. 

Ore treated at mill located at 
mine; concentrate smelted at 
Kalgoorlie smelter and matte 
shipped to Kwinana refinery. 

Ore mined at Nepean is sold under 
contract to WMC for treatment at 
Kambalda. 

Ore treated at mill located at 
mine and concentrate is road- 
hauled to Lenora and railed from 
there to the Kalgoorlie smelter 
for toll smelting to matte, 
which is exported to the United 
States. 

Ore sold under contract to West- 
ern Mining Corp., Ltd. for 
treatment at Kambalda. 



QUEENSLAND 



Greenvale, about 200 km 
west of Townsville. 



Metal Exploration, Ltd. , 
and Freeport of Austra- 
lia, Inc. 



Ore railed 225 km to Yabulu re- 
finery on the coast to produce 
mixed nickel-cobalt sulfide and 
nickel oxide sinter — all for 
export. 



37 



Analysis of Pertinent Factors 

Compared with the 1980 production of 
74,300 tons of contained nickel in nickel 
ore and concentrate, the nickel content 
of matte was 32,500 tons and of refined 
nickel metal 17,448 tons. Mixed nickel- 
cobalt sulfides had nickel content of 
3,731 tons and nickel oxide metal content 
of 17,861 tons. Therefore, Australian 
producers have the option of increasing 
refined metal production. The capacity 
for treatment of nickel concentrates of 
the nickel smelter in Kalgoorlie was ex- 
panded from 360,000 tons of ore to 
450,000 tons per year by the installation 
of a new furnace in 1978. As a result, 
matte production in Western Australia in- 
creased from 47,825 tons in 1978 to 
56,558 tons in 1979, but declined to 
51,700 tons in 1980. The smelter capac- 
ity can be further expanded substantially 
by adding oxygen to the air supply. The 
Kwinana refinery has the capacity to 
produce about 30,000 tons of metal. This 
capacity sets the limit of refined nickel 
production from Australian sulfide ores. 
Were it not for company policy and the 
fact that the industry is suffering from 
a worldwide excess capacity and weak 
demand, all of Australia's nickel pro- 
duction could come to the world market as 
refined metal and high-grade nickel 
oxide. These markets are principally the 
European Community, Japan, and the United 
States. EC's imports of nickel are sub- 
stantially as matte from Australia, 
Canada, and New Caledonia and as un- 
wrought metal from Australia, Canada, 
and South Africa. Imports of ores and 
concentrates are negligible. Japan's 
imports are overwhelmingly ores and 
concentrates, principally from Indonesia, 
New Caledonia, and the Philippines. 
Canada is the principal supplier for the 
U.S. market. Australia provided 11% of 
U.S. imports in 1980. In 1979 and 1980, 
the United States imported nickel metal, 
powder, and flakes and matte originating 
from the Agnew Mine. Western Hemisphere 
producers such as Guatemala, the Domini- 
can Republic, and Colombia are also 
potential suppliers to the United 
States. 



From a tariff point of view in the EC 
market, Australia is on the same footing 
with Canada and South Africa, but New 
Caledonia has GSP access to the EC mar- 
ket. However, New Caledonia's matte and 
speiss are exported to France. There- 
fore, Australia has no tariff disadvan- 
tages vis-a-vis its competitors for the 
EC market. But access to the Japanese 
for nickel as metal would be difficult 
because Japan is the third largest world 
producer of smelter nickel, with raw 
material supplies from New Caledonia and 
Indonesia. Canada has transportation 
advantages in the U.S. market. In view 
of these factors , Australia may have dif- 
ficulty in substantially increasing 
nickel metal exports. Australian pro- 
ducers may find it advantageous to con- 
tinue exporting matte nickel-cobalt sul- 
fide as such rather than establishing the 
necessary refining facilities, which may 
not be economic. 



TIN 



Commodity Profile 

Tin ore is produced principally in 
Queensland, New South Wales, and Tas- 
mania. These three States accounted for 
96% of production of contained tin in 
1980. Tasmania is the largest producer 
(54% of total production in 1980). The 
Renison underground mine (the largest 
underground tin mine) of Renison Ltd. in 
Tasmania and the Ar die than mine of Aber- 
folye Ltd. in New South Wales were 
the two largest mines. Third was the 
Cleveland Mine of Aberfoyle Ltd. at 
Luina, Tasmania. Renison accounted for 
41% of Australian production in 1980. 
Queensland production comes from a number 
of mines and operations by small miners. 

Bureau of Mineral Resources of Austra- 
lia estimates "Australian demonstrated 
economic resources as 215,600 tons of 
contained tin and inferred economic 
resources as 123,600 tons of contained 
tin. I 9 Australia (along with Brazil) is 



19 



Work cited in footnote 3. 



38 



generally considered by the world indus- 
try as the most promising country for 
future tin "finds." 

Consumption of tin during 1976-80 
ranged from about 3,000 to 3,760 tons. 
In 1979 tinplate and templates and sol- 
ders ranked first and second in 
consumption: 2,067 and 1,119 tons 
respectively. 

The main operating producer of primary 
refined tin is the Alexandra smelter of 
Associated Tin Smelter Pty., Ltd., in 
Sydney, which has a capacity to treat 
15,000 tons of concentrate and produce 
7,000 tons of refined tin. The smelter 
of Greenbushes Tin Ltd. at Greenbushes , 
Western Australia, which produces anti- 
monial tin, has a capacity of about 
1,000 tons. Australia exports tin con- 
centrate principally to Malaysia, and 
metal to the United Kingdom, the Nether- 
lands, New Zealand, and some South- 
Southeast Asian countries. In 1981 
exports totaled 14,910 tons of tin con- 
centrates (7,353 tons tin content) and 
1,256 tons of metal. 

Analysis of Pertinent Factors 

Australia could expand tin metal pro- 
duction to substitute for export of con- 
centrates. Imports of unwrought and 
unalloyed tin in the EC, Japan, and the 
United States are free, and tariffs would 
not be a factor inhibiting Australia from 
switching to metal from ores and concenr- 
t rates. Since the Renison Mine in Tas- 
mania accounts for almost half of Aus- 
tralia's mine production, and the mine is 
relatively close to sea routes , Tasmania 
offers a favorable location for a new 
smelter. However, it is reported that 
the operating company has not found it 
advantageous to build one. In consider- 
ing investments in expansion of tin min- 
ing or a new smelter, the important 
factor is the low, and perhaps even nega- 
tive, rate of growth in demand for tin. 
Furthermore, there is a vast world tin 
smelter overcapacity. These smelters are 
eager to obtain concentrate from Austra- 
lia. But for these factors, which may 



inhibit investment in a smelter, Austra- 
lia should be able to process all the 
tin it produces for the domestic and 
export markets. 

TITANIUM MINERALS 

Commodity Profile 

Australia's share of world production 
of rutile, ilmenite (including leucox- 
ene), and zircon are about 60%, 30%, 
and 70%, respectively. In 1981, Aus- 
tralia produced 229,251 tons of rutile 
concentrate, 1.3 million tons of il- 
menite, and 425,064 tons of zircon 
concentrate. 

These minerals are mined in sand depos- 
its. Currently, the narrow strip of 
coast of New South Wales and Queensland, 
between Newcastle and North Stradbroke 
Island, accounts for about 65% and 47%, 
respectively, of Australia's rutile and 
zircon production. About 95% of Austra- 
lia's ilmenite production, 35% of its 
rutile, and 53% of its zircon are from 
mineral sands south of Perth in the Bun- 
bury region, and near Eneabba, in Western 
Australia. 

Production of rutile and zircon from 
the east coast deposits will decrease in 
future years, owing to depletion of the 
higher grade deposits and environmental 
restrictions now being placed on sand 
mining in some areas. However, the de- 
posits of heavy mineral sands that were 
developed in the early 1970 's near 
Eneabba on the west coast, north of 
Perth, contain significant amounts of 
rutile and zircon in association with 
ilmenite, and will maintain Australia's 
position as the world's leading supplier 
of rutile and zircon. 

On the east coast, mineral sands are 
mined at North Stradbroke Island in 
Queensland, and in the Newcastle area, 
Myall Lakes, Kempsey, in New South Wales. 
Capel, Bunbury, Eneabba, and Geraldton 
are centers of operation in the west 
coast area. Separation plants at New- 
castle, Harrington Head, Hawkes Nest, 



39 



Dunwich and Brisbane on the east coast 
and plants at the above locations on the 
west coast produce ilmenite, rutile, and 
zircon concentrates. 

According to a reassessment of reserves 
by the Bureau of Mineral Resources in 
1981, identified resources of ilmenite 
and rutile are 60.6 million tons and 11.6 
million tons respectively. 20 

About one-third of the ilmenite re- 
sources, i.e., the bulk of ilmenite on 
the east coast, is relatively high in 
chromium or otherwise unsuitable for the 
production of pigment by the sulfate 
process. Environmental considerations 
preclude the mining of 3 million tons of 
rutile resources on the east coast. 



and world production capacity for tita- 
nium sponge in 1981 was 102,000 tons, 
leaving only a 10,000-ton gap between the 
present capacity and anticipated 1990 
demand. Because of excellent and abun- 
dant rutile resources, which are geo- 
graphically well located for sea trans- 
portation, Australia could be able to 
become a world supplier of titanium 
sponge. However, there is a 5% ad 
valorem tariff for the U.S. market and 6% 
for the European Community, the two 
principal markets for titanium sponge. 
Japan itself is a large exporter of 
sponge. 

TUNGSTEN 

Commo dity Profile 



Of the 1981 production of 1.3 million 
tons of ilmenite concentrate, 933,000 
tons, or about 72%, was exported. Il- 
menite is used domestically for produc- 
tion of titanium pigments by the sulfate 
process. Initially, all rutile and zir- 
con production is for export. 

Analysis of Pertinent Factors 

In keeping with its policy of encourag- 
ing more domestic processing of local 
mineral production, the Australian Gov- 
ernment has been cooperating with the 
State governments and the mineral sands 
industry to study the possible creation 
of new industries using mineral sands as 
a raw material. An obvious option is the 
expansion of titanium pigment for an 
expanded domestic and export 
market. There is also considerable 
interest in the establishment of a tita- 
nium metal plant. Reportedly, negotia- 
tions have been completed for the estab- 
lishment of a 5,000-ton/year titanium 
sponge plant as part of an offset for the 
purchase of McDonnell Douglas F/A-18 air- 
craft. According to the Bureau of Mines 
estimate, world probable demand for 
primary titanium metal could be 
112,000 tons in 1990, with a probable 
average annual growth rate of 5%. Tita- 
nium sponge is currently in oversupply, 



Australia has emerged as an important 
tungsten producer. Production of tung- 
sten concentrates (wolframite and schee- 
lite) , calculated to 65% W0 3 content, 
increased from 3,858 tons in 1976 to 
6,936 tons in 1980; corresponding tung- 
sten contents were 1,988 and 3,561 tons 
respectively. According to the Austra- 
lian Bureau of Mineral Resources , Aus- 
tralia' s demonstrated economic reserves 
are cited as 122,200 tons of WO3 content 
and an additional 80,600 tons as in- 
ferred. Tasmania is the leading produc- 
ing State, accounting for 5% of tungsten 
production in 1980, followed by Queens- 
land; there is also some production in 
the Northern Territory (Molyhil 
scheelite-molybdenum mine of Petrocarb 
Exploration NL) . 

King Island Scheelite Pty. , Ltd. , a 
member of the Peko-Wallsend group, 
operating two underground mines, a 
concentrator, and a synthetic scheelite 
plant on King Island, is the largest 
tungsten concentrate producer in Austra- 
lia. The Mount Carbine Mine of Queens- 
land Wolfram Pty., Ltd., is the other 
significant producer (1,775 tons of con- 
centrate in 1980). Western Australia may 
also contribute to Australian production 
resulting from the anticipated develop- 
ment of the Mount Mulgine deposits in 
Western Australia. 



20 



Work cited in footnote 3. 



40 



Australia's tungsten concentrates ex- 
ports are currently shipped principally 
to the Federal Republic of Germany, 
Sweden, the Netherlands, the United 
States, and Japan. The Federal Republic 
of Germany is the leading importer, re- 
ceiving more than half the total. 
Further processing of Australian tungsten 
concentrate must be based on concentrates 
available in sufficient quantities, pref- 
erably not from dispersed mines. From 
this point of view, King Island Scheelite 
and the Tasmanian Mines are placed favor- 
ably for a tungsten processing industry. 

Analysis of Pertinent Factors 

Any decision for the further processing 
of tungsten concentrates has to consider 
the varied end products from this com- 
modity and their uses, i.e., tungsten 
carbide for cutting and wear-resisting 
material and high-speed tool and die 
alloys, and chemicals for nonmetallurgi- 
cal uses. Based on U.S. practice, where 
nearly 85% of tungsten concentrates are 
processed into ammonium paratungstate 
(APT), and the Korean practice of 
processing tungsten minerals, Australian 
producers may also opt for producing APT. 
APT is used for making tungsten metal 



petroleum-powder (part of which is used 
in producing tungsten carbide powder) and 
tungsten chemicals. The U.S. tariff on 
APT is 12.1% ad valorem, and the EC 
tariff is 5.7%. China and the Republic 
of Korea are the principal sources of 
U.S. imports of APT. Taking into account 
the relatively high tariffs and the high- 
ly competitive world market, Australian 
producers may not find it profitable to 
invest in APT production for export. The 
production of APT for sale in itself is 
not very profitable unless it is part of 
other processing operations of the same 
company. The added value of APT is only 
15% to 25% (and sometimes less), and the 
cost of production commonly allows little 
or no net profit. In the production of 
end products, Australia would compete 
with long-established production facili- 
ties in Sweden, the Federal Republic of 
Germany, the United States, etc., which 
enjoy technological and market advan- 
tages. Another factor is that Korea is 
eligible for duty-free access to the 
Japanese market under Japan's GSP scheme 
and would thus have a competitive advan- 
tage in that market. There may be no 
advantage for Australia to convert its 
tungsten concentrate to APT for export. 



SUMMARY 



Australia has a policy of maximum local 
processing of Australian raw materials. 
In terms of availability and location of 
reserves and energy costs, the bauxite- 
alumina-aluminum industry is the prime 
candidate for execution of this policy. 
Australia has ambitious plans for in- 
creasing aluminum production which 
eventually are expected to be achieved. 

Such may not be the case for iron and 
steel, even though Australia has vast 
reserves of high-quality iron ore and 
coal. One factor leading to this 
conclusion is the geographical separation 
of the large iron ore deposits and the 
coal mines in Australia. More important, 
however, are such factors as excess 
world steel capacity, establishment of 
new steel plants in the emerging 
industrialized countries and in some 



producing countries which have large 
reserves of natural gas, and the antici- 
pated low rate of growth in steel con- 
sumption in the industrialized countries. 
Expansion of the steel industry in 
Australia would be in response to its 
own increasing consumption requirements. 
The same would also be true for manganese 
ore, for which the steel industry is the 
most important outlet. 

Australian nickel producers are able to 
increase production of metal because of 
existing excess capacity. Any additional 
investment would have to await improve- 
ment in the industry's situation. 

Australia is emerging as an important 
world source for tungsten. Producers 
have the option of producing ammonium 
paratungstate (APT) for export instead of 



41 



concentrates. But production of APT is 
not considered particularly profitable 
unless it is used as a material for pro- 
ducing end products such as metal powder 
and tungsten carbide. In the export of 
APT, Australian producers have to con- 
sider competition from the Republic of 
Korea and China and in the production of 
end products, competition with estab- 
lished production facilities in Sweden, 
the Federal Republic of Germany, and the 
United States. 

For nonf errous metals , the picture is 
mixed. Much of Australia's copper and 
lead ores are already smelted in Austra- 
lia. For copper, production of ore from 
each of the remaining copper mines is too 
small at this time to justify a smelting 
complex. The prospect for additional 
smelting capacity will depend on the 
development of a large deposit currently 
being explored. Except for company 
policy, Australia is in a favorable posi- 
tion to expand lead smelting for export 
as new deposits are developed. A 
substantial share of Australia's zinc 
concentrate production is exported as 
such, and it would be logical to expand 
zinc smelting and increase zinc metal 
export at the expense of zinc concen- 
trate. However, such investment would 
have to take into account new zinc 



refineries being built worldwide and 
tariff advantages that some developing- 
country producers would enjoy in the mar- 
ket of industralized countries. Also 
competitors of Australia have trans- 
portation advantages in the zinc markets 
of the United States and Europe. Aus- 
tralia is well located to export zinc to 
Japan, but Japan is a very large zinc 
producer itself and may not allow its 
domestic industry to suffer. Market fac- 
tors may also inhibit tin producers in 
expanding smelting capacity, particularly 
in view of the very low rate of antici- 
pated tin consumption growth in the next 
decade or so. Finally, Australia has a 
project to produce titanium sponge from 
rutile. The anticipated capacity is 
modest and can find a place in the world 
market . 

The Australian policy of maximum local 
processing is of particular interest to 
the United States for two commodities for 
which Australia is a prime source, alu- 
mina and rutile. Anticipated expansion 
of the aluminum industry will still leave 
several million tons of alumina available 
for export to the United States and other 
markets. Future production of titanium 
sponge would consume only a small per- 
centage of the rutile production, and 
export availability should not suffer. 



1NT.-BU.O F MINES,PGH.,P A. 26727 



o 




c 
c 

E 


dHzlg] 

4 U Z N 


SB 
° S 


311 

■ 

a 
o 
O 


2 
E 


Aluminum Al 
Copper Cu 
Iron and Steel Fe 
Ferromanganese Mn 
Lead Pb 
Nickel Nl 
Tin Sn 
Zinc Zn 


I 


Bauxite Bx 
Copper Cu 
Iron Fe 
Lead-Zinc Pb-Zn 
Manganese Mn 
Nickel Ni 
Mineral Sands MS 
Tin Sn 
Tungatan W 



o» 



S • g 

£ 5 « 
U en a: 



< 

O 

(/) 

i— 

a> 

~o3 

E 
</i 

-o 

c 
o 

w 

<D 

c 



CNI 

LU 
Cd. 

O 



2; 

s 

5 

;> 






PD 150 



w 




v v^ 



" ^« ey 



*0* > •«TVV» A 






••* .♦* 



















4, o 




4 o 







V^V %^>° V*^V 'V^V 

%/•???**.** *V/*'».V .g* ^*^vK** A <^ *<■/''*"•**<? ^*^^\< v <^"" 









» ^ 





;- *W f 




"bv* 



-4,* .•'JJ* 'V- <-° 



^0^ 



^s^ -Jill': W 




"*i«. « r • • • * 






• ^ ' *♦ 



* o^ V^V %--5S- 4 ^ \. % ^^V 






• ++ ** *i$ 

? ^ % 'A 




:- ^ ^ ••. 




°o»7*rrs#> "V'^^'V^ o ^^ 5 % ° V^^'y ^'^'V , 












'o- ^TVi'.v^ 






:- **o« • 








*/•<>* 



r < 









v-o^ 







< <L V rt 







^ -WK* ** ** W / % '.TO' 4? 








V J 




*°V 




* o 



4 A 6 * ^t. *'^ T *" A < V 




**\ 




















• A <- 





• o„ C* 







9 .^L% > 




<L *'VVT* v^ 



"oV" 



' ^ % 



■ v** -'Mm- ^ 













aS * % JFt(/%k. ^ 






J ^v 



•ft' ^* *^ AV!>ir ^.* A' 

A° _ <^. *••• ^ 



* A* ^ 



,* 







1MAY 83?; &^ A \ 



ST. AUGUSTINE 4 U 
^^^ _ . ft v . • • • . ^e 

* O 



J^FLA. C 0" ..■^*. 



IT \ 

n? o • • « ^-. 



